P. O. Box: 21923 Al-Safat 13080 Kuwait - Tel.: + 965 24959000 - Facsimile: +965 24815750/ 70 / 60 Email: [email protected]- Internet Web Site: www.arabfund.org - Address: Arab Organizations Headquarters Building - Airport Road, Shuwaikh Kuwait - State of Kuwait Arab Fund for Economic & Social Development Annual Report 2013
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P. O. Box: 21923 Al-Safat 13080 Kuwait - Tel.: + 965 24959000 - Facsimile: +965 24815750/ 70 / 60 Email: [email protected] - Internet Web Site: www.arabfund.org - Address: Arab Organizations Headquarters Building - Airport Road, Shuwaikh Kuwait - State of Kuwait
Arab Fund for Economic & Social Development
Ann
ual R
epor
t 201
3
Arab Fund for Economic & Social Development
Annual Report 2013
Arab Fund for Economic & Social DevelopmentP.O. Box: 21923 - Safat 13080, Kuwait
Address: Arab Organizations Headquarters BuildingAirport Road, ShuwaikhKuwait - State of Kuwait
2 Annual Report 2013
Annual Report 2013 3
Arab Fund For Economic & Social Development
Member States, Governors and Alternate Governors
(1) States are listed in the order in which their names appear in the list of signatories to the Agreement Establishing the Fund, and according to the date of adhesion to the Agreement.
(2) Names of Governors and Alternate Governors are given as at 31/12/2013. * Membership suspended pursuant to Board of Governors’ Resolution No. 3 of 1993, which has been extended annually by subsequent resolutions of the
Board of Governors until 2013.
Member States(1) Governors(2) Alternate Governors(2)
The Hashemite Kingdom of Jordan H.E. Dr. Ibrahim Saif H.E. Dr. Saleh A. Al-Kharabsheh
The Republic of Tunisia H.E. Mr. Mohamed Lamine Doghri -
The Algerian Democratic and People’s Republic H.E. Mr. Karim Djoudi -
The Republic of Sudan H.E. Mr. Bader El-Din Mahmoud Abbas -
The Republic of Iraq - -
The Kingdom of Saudi Arabia H.E. Dr. Ibrahim Bin Abd-El-Aziz Al- Assaf -
The Syrian Arab Republic - -
State of Libya H.E. Dr. Al-Kilani Abdul Karim Al-Kilani -
The Arab Republic of Egypt H.E. Dr. Ziad Bahaa El-Din H.E. Mr.Osama Saleh
The Republic of Yemen H.E. Dr. Mohammed Saeed Al-Saadi H.E. Dr. Mohamed Ahmed Ali Al-Hawri
The State of Kuwait H.E. Sheikh Salem Abdul Aziz Al Sabah -
The Republic of Lebanon H.E. Mr. Nabil Adnan Al-Jisr H.E. Mr. Alain Bifani
The Kingdom of Morocco H.E. Mr. Mohamed Boussaid H.E. Mr. Khalid Safir
United Arab Emirates H.E. Mr. Obaid Humaid Al-Tayer -
The Kingdom of Bahrain H.E. Sheikh Ahmed Bin Mohammed Al-Khalifa H.E. Mr. Yousif Abdulla Humood
The State of Qatar H.E. Mr. Ali Shareef Al Emadi -
The Somali Democratic Republic* - -
The Islamic Republic of Mauritania H.E. Dr. Sidi Ould Bebbaha Ould Tah H.E. Mr. Ahmedo Ould Ely
Sultanate of Oman H.E. Mr. Darwish Bin IsmaeelBin Ali Al-Bulushi -
Palestine H.E. Dr. Nabil Hani Al-Qaddumi H.E. Dr. Ismail El-Zabri
The Republic of Djibouti H.E. Mr. Ilyas Moussa Dawaleh -
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Annual Report 2013 5
Director General / Chairman of the Board of Directors
Mr. Abdlatif Y. Al-Hamad
Members of the Board
Mr. Abdulwahab Al-Bader
Mr. Ibrahim Bin Mohamed Al Mofleh
Mr. Benaouda Merad
Mr. Taher Sarkez
Dr. Samir El Sayiad
Mr. Mohamed Abdulbaki
Mr. Ali Bin Mohammad Bin Jaffar
Mr. Fouzi Lekjaa
Board of Directors
6 Annual Report 2013
Annual Report 2013 7
(KD Million)
Capital* 2500.0
Total Resources 2824.8
Loans
Number of Loan Agreements Signed During the Year 18
Total Amount of Loan Agreements Signed During the Year 388.0
Total Number of Loans 611
Cumulative Loan Agreements Signed 7986.1
Cumulative Disbursements on Effective Loans 5356.5
Cumulative Loan Repayments 2698.3
Debt Owed to the Arab Fund 2658.2
Grants
Total Number of Grants 1031
Cumulative Grant Commitments 190.8
Cumulative Grant Disbursements 147.0
* During its Annual Meeting held on April 2, 2013, the Board of Governors resolved to increase the authorized capital of the Arab Fund to KD 4 billion and to raise the subscribed capital to KD 3 billion. This capital increase is to be effected through the capitalization of part of the additional reserve in the amount of KD 500 million, and by means of additional subscriptions by member states in the aggregate amount of KD 500 million, to be paid in installments over 5 years.
Basic Financial Data on the Arab Fund
as at 31/12/2013
8 Annual Report 2013
Annual Report 2013 9
Overview of Arab Fund Activities
Introduction
During 2013, the Arab Fund continued its activities aimed at supporting Arab countries’ development efforts through the implementation of high priority economic and social projects. Its lending program focused on infrastructure projects intended to provide basic services, increase production capacity, and improve the investment environment in Arab countries. Furthermore, the Arab Fund continued to allocate national and inter-Arab grants to member countries aimed at providing institutional support and training, implementing emergency programs in some countries, conducting general studies and research, contributing to feasibility studies and project preparation, as well as organizing seminars and conferences.
Public Sector
The Arab Fund extended 18 loans to the public sector in 2013, in 8 Arab countries, for a total amount of about KD 388.0 million. These loans were used for the implementation of 18 projects, including 17 new and 1 previously financed project. The total cost of these projects was estimated at about KD 1.7 billion, with the loans provided by the Arab Fund covering about 23.3% of that amount. The share of loans provided to the transport sector represented about 36.6% of the total loan commitments during the year, and that of the energy and electricity sector about 26.8%. The water and sewerage sector accounted for about 13.4%, the industry and mining sector for about 8.3%, the agriculture and rural development sector for about 7.7%, and the social services sectors for about 7.2%, of the total amount of loans.
Private Sector
The Arab Fund continued to promote the role of the private sector in the development of Arab countries. During the year, the Board of Directors approved the Arab Fund’s participation in the capital of the International Finance Corporation’s fund established to invest in private sector facilities and companies in the Middle East and North Africa region. The Arab Fund also signed the subscription and shareholders agreement relating to its equity participation in a sugar production company in Egypt.
Cumulative Loans
Since the commencement of its activities in 1974 and until the end of 2013, the cumulative number of loans provided by the Arab Fund to the public and private sectors has reached 611 loans for a total amount of about KD 8.0 billion. These loans contributed to the financing of 516 projects in 17 Arab countries, and covered about 25.0% of the total cost of these projects. The infrastructure sectors received the majority of loans extended during that period, with a share of about 70.1% of the total amount of loans, followed by the productive sectors with about 20.3%, then the social services sectors with about
10 Annual Report 2013
7.0%, and the other sectors with about 2.6%. The cumulative number of loans extended to the private sector reached 12 loans for a total amount of KD 48.3 million. The Arab Fund also contributed to the capital of 6 private companies with an amount equivalent to KD 25.2 million. Cumulative disbursements of loans extended by the Arab Fund over the period 1974 - 2013 amounted to about KD 5.4 billion, representing about 79.4% of the net amount of effective loans.
Grants
The Arab Fund provided 22 national and inter-Arab grants in 2013, for a total amount of about KD 7.4 million. These grants included 12 national grants for a total amount of about KD 5.1 million, about 55.3% of which was allocated for the implementation of emergency programs, and about 32.7% for institutional support and training. The grants also included 10 inter-Arab grants for a total amount of about KD 2.3 million, about 67.8% of which was allocated for institutional support and training, and about 26.3% for seminars and conferences.
Cumulative Grants
The cumulative number of grants extended by the Arab Fund, since the commencement of its operations and until the end of 2013, reached 1031 grants, for a total amount of about KD 190.8 million. They included 540 national grants amounting to about KD 132.3 million and 491 inter-Arab grants amounting to about KD 58.5 million. About 82.6% of the net amount of these grants was disbursed.
Support to Palestine
The Arab Fund continued its contribution to the Urgent Program to Support the Palestinian People, in compliance with the decisions of the Arab Fund’s Board of Governors since 2001. During 2013, the Arab Fund allocated about KD 10.4 million to the eleventh phase of the program. Thus, the total contribution of the Arab Fund to this program over the period 2001-2013 reached about KD 123.9 million.
Other Activities
The Arab Fund continued to act as the Coordination Secretariat of the Coordination Group, which includes the Arab national and regional development institutions, and prepare their periodic meetings. The twelfth meeting of the Heads of these institutions took place during the year. The seventy second Coordination Group meeting also took place during the year, with the participation of several international institutions.
Special Account projects were studied during the year in seven Arab countries, through the evaluation of the needs of small and medium enterprises, and the determination and choice of intermediaries qualified to borrow from the Special Account to finance these projects. Furthermore, Special Account representatives participated in several events in Arab countries on the development of small and medium enterprises.
Annual Report 2013 11
The Arab Fund allocated a grant to conduct a study aimed at achieving food security for Arab countries through the Sudan project. It is expected that this study, and the projects resulting from it, will help increase the utilization of water, land and human resources available in Sudan, and satisfy the increasing food needs in Arab countries.
The Arab Fund allocated a grant as a contribution toward the preparation of two studies: the first on “Arab Integration” and the second on “The Arab World in the Year 2025”, in cooperation with the Economic and Social Commission for Western Asia (ESCWA). The first study will address the subject of Arab integration from the perspective of its relationship to economic and social development in the Arab region. The second study aims at exploring the Arab future by analyzing a number of interrelated “scenarios”, which take into account the current situation in the Arab world and its future prospects.
Financial Statements
According to the Arab Fund’s financial statements for the year ending 31/12/2013, total income was about KD 87.15 million compared to about KD 112.00 million in 2012, while total administrative expenses were about KD 8.06 million compared to about KD 8.38 million in 2012. The Arab Fund’s net profit for the year 2013 was about KD 33.51 million, compared to about KD 103.62 million for the year 2012. The statements also show that total member countries’ equity was about KD 2824.79 million as at 31/12/2013, compared to about KD 2808.63 million at the end of 2012.
Annual Report 2013 13
First: The Lending Program
Preamble
During 2013, the Arab Fund provided increased support to projects aimed at reinforcing Arab countries’ development efforts, and improving their infrastructure and basic services. The lending program for the year focused on infrastructure projects, and priority was given to the development of projects in the sectors of transport, energy and electricity, and water and sewerage. The program also included projects in industry, agriculture and rural development, and social services.
Study and Appraisal of Projects
During the year, the Arab Fund studied several requests it received from member countries for financing projects. These projects were then appraised by the Arab Fund’s technical staff through office work and field trips to ensure their technical and economic feasibility, and their conformity with development program priorities in member countries. During 2013, 14 projects were appraised; the total amount of loans expected to be provided for these projects is about KD 405.0 million.
Loan Agreements Signed During 2013
A total of 18 loan agreements were signed during the year, for a total amount of about KD 388.0 million. These loans contributed to the financing of 18 public sector projects, in 8 Arab countries. The total cost of these projects was estimated at about KD 1.7 billion, with the loans provided by the Arab Fund covering about 23.3% of that amount.
Effective Loan Agreements
A total of 12 loan agreements with 7 Arab countries, amounting to about KD 251.0 million, became effective in 2013. These loans were provided for the implementation of strategic projects in areas that included energy, transport, water and sewerage, and industrial projects.
Public Sector Projects
The Arab Fund extended 18 public sector loans during the year, amounting to KD 388.0 million, for the implementation of 17 new projects and 1 previously financed project. Table 1 shows the loan commitments by the Arab Fund during 2013, and Annex 1 provides the project sheets for these loans.
Infrastructure sectors accounted for about 76.8% of the total amount of loans provided during 2013, in light of priorities of member countries’ plans and programs that focused on improving these sectors, and providing an environment conducive to investment and employment opportunities. Five loans were extended to finance transport projects,
14 Annual Report 2013
and amounted to KD 142.0 million or about 36.6% of the total. These projects aim at developing and improving land transport services in Egypt, Mauritania and Yemen, developing maritime transport services through the implementation of the second phase of the Tangiers Med II port in Morocco, and developing air transport services through the construction of the new Nouakchott international airport in Mauritania.
Four loans were extended to finance energy and electricity projects in three Arab countries, namely, Mauritania, Jordan and Sudan. These loans, amounting to KD 104.0 million, represented about 26.8% of the total amount of loans provided during the year. The projects aim at satisfying the increasing demand for electricity in the beneficiary countries. Four loans were also allocated for water and sewerage projects, and amounted to KD 52.0 million. The projects aim at satisfying the increasing demand for drinking water in Morocco, Djibouti and Mauritania, as well as providing sewerage services in Yemen. The loans provided by the Arab Fund during the year also included two loans for a total amount of KD 32.0 million to finance industrial projects in Sudan and Tunisia, two loans for a total amount of KD 28.0 million to finance projects in the social services sectors in Yemen, in addition to a loan for an amount of KD 30.0 million to complete a project in the agricultural and rural development sector in Sudan.
Annual Report 2013 15
Table 1Loan Commitments During 2013
No. Country Project Amount of Loan(KD Million)
Date of Signature of Loan Agreement
1. Republic of Sudan Loan Program for Industrial Development Projects 10.0 02/01/2013
2. Kingdom of Morocco Water Supply of Tetouan Area 7.0 31/01/2013
3. Islamic Republic of Mauritania
Development of Power Generating Stations for Interior Cities 3.0 03/02/2013
4. Hashemite Kingdom of Jordan
Al-Samra Electric Power Generating Station (Phase VI) 30.0 11/02/2013
5. Republic of Sudan Upper Atbara and Setit Dams Complex (Supplementary Loan) 30.0 18/03/2013
6. Republic of Yemen Sanitary Networks in Sana’a (Phase IV) 15.0 20/03/2013
7. Arab Republic of EgyptModernization of the Signaling System on the Benha - Zagazig - Ismailia - Port Said Corridor
44.0 02/04/2013
8. Islamic Republic of Mauritania
Construction of a 30 MW Wind Farm in Nouakchott 14.0 02/04/2013
9. Islamic Republic of Mauritania
Néma - Mali Border Road (Section III) 9.0 02/04/2013
10. Republic of Tunisia Mdhila 2 Triple Super Phosphate Fertilizer Production 22.0 19/06/2013
11. Islamic Republic of Mauritania
New Nouakchott International Airport 9.0 09/07/2013
12. Republic of DjiboutiRehabilitation of the Distribution Networks of Drinking Water in Djibouti City
10.0 09/07/2013
13. Republic of Yemen Reconstruction of Abyan 10.0 11/07/2013
14. Republic of Yemen Educational Hospital for Aden University 18.0 11/07/2013
15. Republic of Yemen Rehabilitation and Expansion of Sana’a - Al Hudaydah Road 30.0 11/07/2013
16. Republic of Sudan Nyala - El-Geneina Transmission Line to the Darfur States 57.0 11/07/2013
17. Islamic Republic of Mauritania
Drinking Water and Development of Oases in Rural Areas. 20.0 15/12/2013
18. Kingdom of Morocco Tangier Med II Port (Phase II) 50.0 17/12/2013
Total 388.0
Annual Report 2013 17
Private Sector Projects
The Arab Fund continued to support and promote the role of the private sector in the economic and social development of Arab countries. During the year, the Arab Fund received many requests to participate in the financing of private sector projects in various areas, including agriculture and fisheries, electricity, flour mills, tourism and other services. Upon studying such requests, it became evident that most of them do not meet the requirements set forth in the Arab Fund’s guidelines for private sector financing. The reasons for not meeting the requirements included incomplete project studies for evaluation purposes, lack of sufficient guarantees, inappropriate legal status of project entities or their lack of financial and administrative capabilities, in addition to the fact that some member countries have not yet provided the Arab Fund with the necessary immunities and exemptions commitments regarding its activities in the private sector in those countries.
The financing requests received during the year, which are currently being studied and whose data and other documents required for their evaluation are being compiled, relate to a power generating station project in Egypt, the expansion of a flour mill factory in Yemen, a touristic complex project in Morocco, a housing city project in Egypt and a hotel project in Mauritania.
During 2013, the Board of Directors approved the Arab Fund’s participation in the capital of the International Finance Corporation’s fund established to invest in private sector facilities and companies in the Middle East and North Africa region, with an amount that does not exceed KD 10 million. This fund aims at supporting and encouraging individual initiatives, and stimulating the private sector, through taking advantage of new and profitable investments in private sector companies and enterprises in Arab countries members in both the International Finance Corporation and the Arab Fund.
The Arab Fund also signed, during the year, the subscription and shareholders agreement relating to its equity participation in Al Sharkey Sugar Manufacturing Company, which was established for purposes of implementing and operating Al Noran sugar project in the Sharkey province in the Arab Republic of Egypt. This project is one of the largest sugar production plants in Egypt, as its annual production capacity is expected to exceed half a million tons of sugar when it becomes operational. The project is expected to reduce the current gap between the supply and demand for sugar in Egypt by 25%, as well as provide about 3,000 direct and 50,000 indirect employment opportunities in the areas of agriculture, transport and distribution. Moreover, the project will help conserve water as it will depend exclusively on sugar beet.
The total cost of the project is estimated at about 2.5 billion Egyptian Pounds (EGP), the equivalent of about KD 102.2 million. The project will be financed through subscription to shares of the capital stock of the company that will own and operate it, in the amount of about EGP 637.0 million, the equivalent of about KD 26.0 million. The remaining financing will be provided through an Islamic syndicated term facility to be arranged by a group of local Egyptian banks, and through an Islamic mezzanine facility managed
18 Annual Report 2013
by the Islamic Corporation for the Development of the Private Sector, a member of the Islamic Development Bank Group. The Arab Fund will contribute to the financing of the project with an amount that does not exceed the equivalent of KD 10 million, through both a contribution to the equity capital of the company and the use of the Islamic mezzanine facility managed by the Islamic Corporation for the Development of the Private Sector.
The Arab Fund played a pivotal role in the design and structuring of the project documents and its financing agreements, and in setting appropriate pillars and mechanisms for the governance of the project company for purposes of ensuring fairness and transparency of all deals and transactions entered into by the company with parties. These efforts culminated in the signing, in April 2013, of the subscription and shareholders agreement of the project company by the Arab Fund, the project promoters, Al Noran Sugar Company, Noran MultiTrading Company, the Islamic Corporation for the Development of the Private Sector, and the Egyptian Sugar and Integrated Industries Company owned by the Egyptian Government.
During the year, all works related to the central cold storage project of the Logistics Company for Storage Services in Egypt, to whose capital the Arab Fund contributed 25%, were completed, and the company made all the necessary arrangements to conduct the commissioning and start up tests of the project.
With regards to the repayment of loans provided by the Arab Fund to finance private sector projects, four loans were fully repaid as at 31/12/2013 for a total amount of KD 9.0 million. These loans have generally helped attain the objectives of the financed projects. Monitoring of Projects
The Arab Fund continued to monitor the progress of ongoing projects, follow the implementation of the covenants set forth in their loan agreements, and take the necessary steps to ensure their proper implementation. During 2013, 11 projects were completed; their total cost amounted to about KD 0.9 billion, with the Arab Fund covering about 26.3% of that cost.
Cumulative Lending Activities
Since the commencement of its operations in 1974 and until the end of 2013, the Arab Fund extended 611 loans, for a total amount of about KD 8.0 billion. These loans contributed to the financing of 516 projects in 17 Arab countries, and covered about 25.0% of the total cost of these projects. Annex 3 presents a summary of the loans extended to member countries over the period 1974-2013, while Annex 5 provides details on these loans.
The cumulative amount of loans extended by the Arab Fund for infrastructure projects reached about KD 5.6 billion, or about 70.1% of the total amount of loans, of which about KD 2.6 billion was earmarked for energy and electricity projects, about KD 2.1 billion for transport and telecommunications projects, and about KD 0.8 billion for water and sewerage projects.
Annual Report 2013 19
During the Period 1974 - 2013
Energy & Electricity
32.8%
Industry & Mining
5.9%
Agriculture & Rural Dev.7.7%
Industry & Mining
8.3%
Water & Sewerage13.4%
Social Services7.2%
Transport & Telecom.
26.8%
Social Services7.0%
Agriculture & Rural Dev.
14.4%
Sector2013 1974 - 2013
Amount % Amount %
1. Infrastructure Sectors
Transport and Telecommunications 142.00 36.6 2137.90 26.8
Energy and Electric Power 104.00 26.8 2620.75 32.8
Water and Sewerage 52.00 13.4 837.25 10.5
Subtotal 298.00 76.8 5595.90 70.1
2. Productive Sectors
Industry and Mining 32.00 8.3 472.03 5.9
Agriculture and Rural Development 30.00 7.7 1146.80 14.4
Subtotal 62.00 16.0 1618.83 20.3
3. Social Services Sectors* 28.00 7.2 564.50 7.0
4. Other Sectors** 0.00 0.0 206.83 2.6
Grand Total 388.00 100.0 7986.05 100.0
* Include Education, Health, Housing and Social Development.** Include Loan Commitments for Emergency Projects.
Table 2 Loan Commitments by Sector
(KD Million)
Sectoral Distribution of Loan Commitments (Percentage)
Energy & Electricity26.8%
Other Sectors2.6%
Water & Sewerage
10.5%
During 2013
Transport & Telecom.
36.6%
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Loans for productive sector projects amounted to about KD 1.6 billion, or about 20.3% of the total amount of loans, of which about KD 1.1 billion was earmarked for projects in agriculture and rural development, and about KD 0.5 billion for projects in industry and mining. Loans for projects in social services sectors amounted to about KD 0.6 billion, accounting for about 7.0% of the total, and were allocated to finance projects in education, health, housing and social development. The remaining 2.6% of the total amount of loans, about KD 0.2 billion, was provided to finance projects in other activities.
In addition to financing the main components of projects, the loans also contributed to institutional support of the entities involved and training of their employees in order to enhance their efficiency. Table 2 shows the sectoral distribution of the loans extended by the Arab Fund during 2013 and over the period 1974-2013, while Annex 4 provides a summary of that distribution among beneficiary member countries over the same period.
The cumulative lending activities of the Arab Fund also included 12 loans for private sector projects, for a total amount of KD 48.3 million, which contributed to 10 projects in Bahrain, Yemen, Mauritania, Sudan and Jordan. These loans covered various areas, such as health services, tourism, iron and steel production, glass manufacturing, glass coating, cement, grain silos and flour mills, sugar refining and lease financing of small and medium projects and enterprises. In addition to the loans extended to the private sector, the Arab Fund also contributed to the capital of 7 private companies in 4 Arab countries in the areas of healthcare, glass container manufacturing, iron and steel production, cement production, power generation, storage facilities and sugar production.
Inter-Arab Projects
The Arab Fund maintained its support to joint Arab efforts to build a basic framework and to strengthen means of communication and interconnections between member countries. Since the start of its operations in 1974 and until the end of 2013, the Arab Fund extended 65 loans for a total amount of about KD 349.1 million. These loans contributed to the implementation of 31 inter-Arab projects in the areas of telecommunications, electric power, natural gas and international roads. Total disbursements of these loans reached about KD 291.7 million at the end of 2013, or about 94.8% of their net amount. Annex 6 provides details on the loans extended by the Arab Fund to finance inter-Arab projects over the period 1974-2013.
Co-Financing Activities
The Arab Fund also continued its co-financing of projects in Arab countries with Arab national, regional and international development institutions. During 2013, four projects were co-financed with other institutions. These projects included land and maritime transport projects, industry and mining projects, and agriculture and irrigation projects. During the period 1974-2013, the total contribution of the Arab Fund to projects co-financed with Arab national, regional and international development institutions reached about KD 3.7 billion, representing about 31.3% of the total amount of co-financing of about KD 11.8 billion. Annex 8 provides details on co-financing activities over that period.
Annual Report 2013 21
Disbursements and Repayments
Total disbursements during 2013 amounted to about KD 251.5 million, of which about KD 0.1 million were disbursed to finance private sector projects. Cumulative disbursements of all loans over the period 1974-2013 amounted to about KD 5356.5 million, including KD 39.4 million for private sector projects. Repayments of loans in 2013 amounted to about KD 158.4 million, of which about KD 6.6 million were from the private sector. Cumulative repayments over the period 1974-2013 totaled about KD 2698.3 million, which represented about 50.4% of cumulative disbursements.
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Box 1 The Universal Networking Digital Language
In order to break the language barrier between researchers from different parts of the world, the Universal Networking Digital Foundation, a non-profit organization located in Geneva, Switzerland, is developing a program, the Universal Networking Digital Language (UNDL), that could be used to translate between 49 languages. The program includes all major languages used worldwide, such as Arabic, English, Chinese, French, Spanish, Russian, Portuguese, etc. This is accomplished by creating 49 different digital dictionaries, one for each language, and developing 49 programs (encoders), to translate from each language to an intermediate digital language and a similar number of translators (decoders) to translate back from the intermediate language to any of the 49 languages.
Recognizing the potential benefits of such a program to Arab citizens, in general, and Arab researchers, in particular, the Arab Fund extended, over the last 10 years, eight grants, totaling around KD 2.5 million to support the development of this program. A significant part of these funds is being used to establish and support the activities of the Arabic Computational Linguistic Center, located in the Library of Alexandria (Bibliotheca Alexandrina), Egypt.The Center is responsible for creating the Arabic digital dictionary and developing the Arabic decoder and encoder, and the interface between them and the intermediate language, which is being developed by the UNDL Foundation.
The dedicated efforts of the teams working on this program are starting to bear fruit. The year 2014 should witness the launching of three applications. The first application is a multi-lingual dictionary containing over 10 million words of which 20% are Arabic, the second is a language to language translator that also understands sentence syntax and has the capability of improving such syntax, and the third is a knowledge extraction system. This application will display all usages of a word, to denote whether it was used to name a person, a street, a city or a treaty.
Based on a suggestion made by the Arab Fund, all three applications will be available free of charge on the internet, as a result of the UNDL Foundation donating the ownership rights of the program to the United Nations for the use of the public at large. The UN, in turn, has entrusted the Foundation with developing the program, conducting workshops worldwide to broaden its use, and encouraging users and developers to interact with it to improve its performance.
Annual Report 2013 23
Second: Grants Grants During 2013
Many grant applications were reviewed during 2013, and priorities were determined in coordination with the concerned institutions in the member countries, subject to available resources. A total of 22 grants, amounting to about KD 7.4 million, were approved during the year. These grants included 12 national grants which amounted to about KD 5.1 million, and were provided to 6 Arab countries. The grants also included 10 inter-Arab grants which amounted to about KD 2.3 million, and were allocated to support activities of common interest to most Arab countries. Table 3 presents the national and inter-Arab grants approved during 2013. The Arab Fund continued to give priority to activities that reinforce institutional support and training, with 13 grants allocated to these activities for a total amount of about KD 3.2 million, representing about 43.5% of total grants provided during the year. These grants included 7 national grants for a total of about KD 1.7 million, and 6 inter-Arab grants for a total of about KD 1.5 million. The grants aimed at enhancing the performance of specialized institutions by improving the quality of services they provide, in addition to supporting the activities of research and education centers, providing several health centers with equipment and supplies to improve their services, contributing to the general census of population and housing in some Arab countries, as well as contributing to the development of the Universal Networking Digital Language program. The grants provided during 2013 included 2 grants, for a total amount of about KD 2.8 million, for the implementation of emergency programs. These grants, representing about 38.3% of the total amount of grants provided during the year, were allocated as a contribution to the projects and programs for the urgent relief of the Syrian refugees in Jordan and Lebanon. Grants were also allocated for the financing of studies and research in Arab food security. Table 4 shows the grant commitments by activity.
Cumulative Grants
Since the beginning of its operations and until the end of 2013, the Arab Fund provided 1031 grants for a total amount of about KD 190.8 million. They included 540 national grants, amounting to about KD 132.3 million, which were allocated as follows: about KD 64.1 million for institutional support and training, about KD 16.6 million for feasibility studies and project preparation, about KD 5.3 million for general studies and research, and about KD 164 thousand for seminars and conferences. These grants aimed at improving the performance of specialized institutions, enhancing the quality of services they provide, training their employees and managers, developing their information and data systems, undertaking population censuses, supporting the activities of several research centers, and preserving national heritage. Furthermore, national grants included grants for a total amount of about KD 46.2 million, which were allocated to support emergency programs to alleviate the effects of natural disasters, local disturbances, or damage caused by external aggression in some Arab countries.
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The grants provided over the same period also included 491 inter-Arab grants, amounting to about KD 58.5 million, which were allocated as follows: about KD 32.6 million to provide institutional support and training programs in several specialized scientific and research centers, about KD 13.1 million to undertake general studies and research in various economic and social development areas, about KD 6.4 million to conduct feasibility studies for specific projects, about KD 4.4 million to organize seminars and conferences to discuss priority development issues for Arab countries, in addition to about KD 2.0 million to implement emergency programs.
Grant Disbursements
Cumulative disbursements of grants approved over the period 1974-2013 amounted to about KD 147.0 million, which constitutes approximately 82.6% of the net amount of grants. Annex 7 provides a summary of the grants committed and disbursed over that period. During 2013, a total of 27 grants, amounting to about KD 5.3 million, were completed. This brought the total number of grants completed during the period 1974-2013 to 865, with a cumulative amount of about KD 129.5 million, while a total of 127 grants, amounting to about KD 54.9 million, remained under execution.
Support to Palestine
The total amount of contributions made by the Arab Fund to Palestine, since the beginning of its operations and until the end of 2013, reached about KD 169.4 million, including about KD 152.4 million in the form of grants, and the remaining in the form of loans provided to the Palestinian National Authority.
The Urgent Program: The Arab Fund continued its efforts to support the Palestinian people and limit the deterioration of the economic and social conditions in the occupied territories. During 2013, the Arab Fund allocated an amount of about KD 10.4 million, or about 10.0% of the Arab Fund’s net income for 2012, to contribute to the eleventh phase of the Urgent Program to Support the Palestinian People, initially started in 2001. Thus, the total contribution of the Arab Fund to this program over the period 2001-2013 reached about KD 123.9 million. This program includes support to educational institutions (universities and colleges) and institutions and civil society entities concerned with social services, improvement of the educational environment and rehabilitation of school buildings, reconstruction of historical buildings, economic empowerment, in addition to rural development. The program is being implemented at an acceptable pace despite the difficulties encountered from the Israeli occupying authorities. The Arab Fund made those contributions through cooperation and coordination with civil society entities and some governmental institutions.
Areas of intervention of the program included support for basic and higher education, as well as training and qualifying graduates. The program enabled thousands of university students to continue their education through coverage of their tuition and fees, contributed to the construction of classrooms to meet the needs of basic education, and provided support to social institutions and civil society entities to allow them to provide the best
Annual Report 2013 25
services in areas of social welfare, motherhood and childhood, handicapped and those with special needs, and orphanages. Areas of intervention of the program also included support to small and medium enterprises, housing for marginalized groups, rural development, reconstruction of historical buildings in old cities in Jerusalem, Nablus and Hebron in order to preserve the cultural and urban heritage, and support to small farmers and craftsmen. The support also included provision of medical devices and equipment to hospitals and medical centers, contributions to the construction of health centers specializing in cardiology, ophthalmology, maternity and primary health care, in addition to the development of infrastructure such as water and electricity facilities, and delivery of drinking water to deprived areas.
The support provided by the Arab Fund to Palestine contributed to the preservation of the various institutions and civil society entities, and enabled them to provide the best services to the Palestinian community. This program also reinforced the perseverance of the Palestinian residents and their presence in Palestine, and the protection of their right to reside and live in the Holy City in the face of the expulsion campaigns, and contributed to the improvement of their living and environmental conditions by providing them with suitable housing, and health, educational, cultural and social services.
Cooperation with International and National Financial Institutions: The Arab Fund continued its administration and follow-up of grants provided by the OPEC Fund for International Development to Palestine. The total number of grants reached 356, amounting to about US Dollars 65.8 million. Disbursements of these grants amounted to about US Dollars 59.3 million, or about 90.1% of the total. The Arab Fund also maintained its cooperation with the Islamic Development Bank, which monitors the implementation of projects financed through Al-Aqsa Fund. This cooperation included support to rural development projects, economic empowerment, urgent reconstruction of historic buildings, construction of roads and schools, rehabilitation of water wells, reclamation of agricultural land, coverage of tuition and fees of university students, and support to non-governmental organizations that provide health, social and education services. The total committed amount is estimated at about KD 29.3 million, including support to Jerusalem, and the disbursed amount reached about KD 22.0 million, or about 75.1%. Coordination between the Arab Fund and the Islamic Development Bank also took place regarding the selection of projects to be financed under the eleventh phase of the urgent program.
26 Annual Report 2013
Gra
nts
App
rove
d D
urin
g 20
13
No.
Ben
efic
iary
/Gra
ntA
mou
nt A
lloca
ted
(KD
000
)N
o. o
f G
rant
Dat
e of
Boa
rd A
ppro
val
A: N
atio
nal G
rant
s
1K
uwai
t/ C
ontri
butio
n to
the
Cos
t of t
he K
uwai
t Blin
d A
ssoc
iatio
n Fo
rum
(4)
10D
G/1-
2013
28/01
/20
13
2Jo
rdan
/ Con
tribu
tion
to th
e C
onst
ruct
ion
of a
Dor
mito
ry fo
r the
Stu
dent
s fro
m D
iffer
ent P
arts
of t
he
Kin
gdom
(2)
200
2/20
1318
/02
/20
13
3Tu
nisi
a/ C
ontri
butio
n to
the
Cos
t of C
ompl
etin
g th
e St
udie
s of t
he B
ousa
lem
- A
lger
ian
Bor
der M
otor
way
Pr
ojec
t (1)
300
3/20
1318
/02
/20
13
4K
uwai
t/ Su
ppor
ting
the A
ctiv
ities
of t
he K
uwai
t Pub
lic R
elat
ions
Ass
ocia
tion
(2)
5D
G/4-
2013
07/03
/20
13
5Eg
ypt/
Con
tribu
tion
to th
e C
ost o
f Pre
para
tion
of th
e 20
16 G
ener
al C
ensu
s of P
opul
atio
n, H
ousi
ng a
nd
Ente
rpris
es (2
)30
05/
2013
01/04
/20
13
6Su
dan/
Con
tribu
tion
to th
e C
ost o
f the
Stu
dy o
f the
Sud
an P
roje
ct to
Ach
ieve
Ara
b Fo
od S
ecur
ity (3
) 30
08/
2013
01/04
/20
13
7Jo
rdan
/ Con
tribu
tion
to th
e Acq
uisi
tion
of a
Com
pute
d To
mog
raph
y Sc
an D
evic
e fo
r the
Dia
gnos
is a
nd
Trea
tmen
t of C
ance
r (2
)30
010
/20
1303
/07
/20
13
8Le
bano
n/ C
ontri
butio
n to
the
Con
stru
ctio
n of
a S
econ
d B
uild
ing
for t
he S
alah
Al D
in Is
lam
ic H
igh
Scho
ol
in T
ripol
i (2)
300
15/20
1303
/07
/20
13
9Le
bano
n/ C
ontri
butio
n to
the
Proj
ects
and
Pro
gram
s for
the
Urg
ent R
elie
f of S
yria
n R
efug
ees i
n Le
bano
n (5
) 14
2117
/20
1301
/12
/20
13
10Jo
rdan
/ Con
tribu
tion
to th
e Pr
ojec
ts a
nd P
rogr
ams f
or th
e U
rgen
t Rel
ief o
f Syr
ian
Ref
ugee
s in
Jord
an (5
) 14
2118
/20
1301
/12
/20
13
11Jo
rdan
/ Con
tribu
tion
to th
e C
ost o
f Con
duct
ing
the
Gen
eral
Cen
sus o
f Pop
ulat
ion
and
Hou
sing
for t
he Y
ear
2014
(2)
500
19/20
1301
/12
/20
13
12Le
bano
n/ C
ontri
butio
n to
the
Con
stru
ctio
n of
Bui
ldin
gs fo
r Kar
yati
Cha
rity
for D
evel
opm
ent a
nd
Envi
ronm
ent A
ssoc
iatio
n (2)
7021
/20
1301
/12
/20
13
Subt
otal
5127
(1) F
easi
bilit
y St
udie
s an
d Pr
ojec
t Pre
para
tion
(2) I
nstit
utio
nal S
uppo
rt an
d Tr
aini
ng(3
) Gen
eral
Stu
dies
and
Res
earc
h
(
4) S
emin
ars
and
Con
fere
nces
(5) E
mer
genc
y Pr
ogra
ms
Tabl
e 3
Annual Report 2013 27
Gra
nts
App
rove
d D
urin
g 20
13
No.
Ben
efic
iary
/Gra
ntA
mou
nt A
lloca
ted
(KD
000
)N
o. o
f G
rant
Dat
e of
Boa
rd A
ppro
val
B: In
ter-
Ara
b G
rant
s
1A
rab
Plan
ning
Inst
itute
/ Con
tribu
tion
to th
e In
stitu
te’s
Pro
gram
s and
Act
iviti
es fo
r the
Yea
r 201
2/20
13 (2
)10
06/
2013
01/04
/20
13
2ER
F/ E
ndow
men
t to
Fina
nce
the
Foru
m’s
Act
iviti
es a
nd P
rogr
ams (2
)50
07/
2013
01/04
/20
13
3In
ter-A
rab/
Con
tribu
tion
to th
e Fi
nanc
ing
of th
e In
tern
atio
nal C
onfe
renc
e on
“A
rab
Wat
er U
nder
O
ccup
atio
n” (4
)15
DG
/9-
2013
17/04
/20
13
4ER
F/ C
ontri
butio
n to
Sup
port
and
Fina
nce
Res
earc
h In
itiat
ives
for A
rab
Dev
elop
men
t and
the
Foru
m’s
A
ctiv
ities
dur
ing
the Y
ear 2
013
(2)
220
11/20
1303
/07
/20
13
5IC
AR
DA
/ Con
tribu
tion
to th
e Fi
nanc
ing
of a
Pro
ject
to Im
prov
e Fo
od S
ecur
ity a
nd S
usta
inab
le
Man
agem
ent o
f Nat
ural
Res
ourc
es in
Cou
ntrie
s of t
he A
rabi
an P
enin
sula
(Pha
se 4
) (3)
600
12/20
1303
/07
/20
13
6U
ND
L Fo
unda
tion/
Con
tribu
tion
to th
e C
ost o
f Com
plet
ion
of th
e D
evel
opm
ent o
f the
Thi
rd P
hase
of t
he
Uni
vers
al N
etw
orki
ng D
igita
l Lan
guag
e Pr
ogra
m (2
)60
013
/20
1303
/07
/20
13
7In
ter-A
rab
(Ara
b Fu
nd)/
Con
tribu
tion
to th
e C
ost o
f a S
emin
ar o
n th
e Ec
onom
ic P
olic
ies t
o A
chie
ve O
vera
ll G
row
th in
Ara
b C
ount
ries i
n Tr
ansi
tion
to D
emoc
racy
(4)
100
14/20
1303
/07
/20
13
8A
rab
Thou
ght F
orum
/ Con
tribu
tion
to th
e C
ost o
f an
Inte
rnat
iona
l Sci
entifi
c C
onfe
renc
e on
End
owm
ents
in
Jeru
sale
m (4
)20
DG
/16
-20
1322
/07
/20
13
9A
rab
Fund
for A
rts a
nd C
ultu
re -
AFA
C/ C
ontri
butio
n to
Sup
port
the A
ctiv
ities
of t
he A
rab
Fund
for A
rts
and
Cul
ture
- A
FAC
(2)
3020
/20
1301
/12
/20
13
10A
rab
Educ
atio
nal I
nfor
mat
ion
Net
wor
k/ C
ontri
butio
n to
the
Inst
itutio
nal S
uppo
rt of
the A
rab
Educ
atio
nal
Info
rmat
ion
Net
wor
k Ph
ase
II (2
)10
022
/20
1301
/12
/20
13
Subt
otal
2285
Tota
l74
12
(1) F
easi
bilit
y St
udie
s an
d Pr
ojec
t Pre
para
tion
(2) I
nstit
utio
nal S
uppo
rt an
d Tr
aini
ng(3
) Gen
eral
Stu
dies
and
Res
earc
h
(
4) S
emin
ars
and
Con
fere
nces
(5) E
mer
genc
y Pr
ogra
ms
Tabl
e 3
(con
tinue
d)
28 Annual Report 2013
Act
ivity
Dur
ing
2013
Dur
ing
the
Peri
od 1
974
- 201
3
Nat
iona
l Gra
nts
Inte
r-A
rab
Gra
nts
Tota
lN
atio
nal G
rant
sIn
ter-
Ara
b G
rant
sTo
tal
Am
ount
%A
mou
nt%
Am
ount
%A
mou
nt%
Am
ount
%A
mou
nt%
1. F
easi
bilit
y St
udie
s and
Pro
ject
Pre
para
tion
300
5.9
-
-
300
4.1
1662
012
.663
8010
.923
000
12.1
2. In
stitu
tiona
l Sup
port
and
Tra
inin
g16
7532
.715
5067
.832
2543
.564
075
48.4
3264
555
.896
720
50.7
3. G
ener
al S
tudi
es a
nd
R
esea
rch
300
5.9
600
26.3
900
12.1
5300
4.0
1307
122
.418
371
9.6
4. S
emin
ars a
nd C
onfe
renc
es10
0.2
135
5.9
145
2.0
164
0.1
4409
7.5
4573
2.4
5. E
mer
genc
y Pr
ogra
ms
2842
55.3
-
-
2842
38.3
4616
234
.920
003.
448
162
25.2
To
tal*
5127
100.
022
8510
0.0
7412
100.
013
2321
100.
058
505
100.
019
0826
100.
0
* D
oes
not i
nclu
de a
n am
ount
of a
bout
KD
123
.9 m
illion
allo
cate
d by
the
Boar
d of
Gov
erno
rs o
f the
Ara
b Fu
nd to
sup
port
the
Pale
stin
ian
peop
le, o
ver t
he p
erio
d 20
01 -
2013
.
Gra
nt C
omm
itm
ents
by
Act
ivit
y(K
D 0
00)
Tabl
e 4
Annual Report 2013 29
Grant Commitments by Activity(Percentage)
Inter-Arab Grants during 2013 National Grants during 2013
Inter-Arab Grants during the Period 1974 - 2013 National Grants during the Period 1974 - 2013
Inst. Support & Training
32.7%
Seminars &Conf.0.2%
Feasinility Studies &
Project Prep. 5.9%
General Studies & Research
5.9%
Feasibility Studies & Project Prep.
12.6%
Feasibility Studies & Project Prep.
10.9% Inst. Support & Training
55.8%
General Studies & Research
22.4%
Seminars &Conf.5.9%
General Studies & Research
26.3%
General Studies & Research
4.0%
Seminars &Conf.0.1%
Emergency Programs
34.9%
Inst. Support& Training
67.8%
Inst. Support & Training48.4%
Emergency Programs
3.4%
Seminars &Conf.7.5%
Emergency Programs
55.3%
30 Annual Report 2013
Box 2
The Arab Fund Fellowships Program
In 1987, the Board of Directors of the Arab Fund established an endowment of KD 2 million and allocated the returns as non-refundable grants to finance post-graduate scholarships for high achieving Arab graduates. By 1997, it was decided to use the accumulated returns of the endowment to fund a fellowships program, that is, a post-doctoral fellowships program for distinguished Arab scholars. The purpose of the program is to provide Arab Ph.D. holders who have excellent academic track records with opportunities to conduct research or lecture in the best universities of the world. The program is also intended to build bridges and achieve mutual benefits between Arab and foreign universities, and facilitate the transfer of knowledge to the Arab countries. The fellowship is for a maximum period of twelve months.
The program is overseen by an Academic Evaluation Committee, comprising of highly renowned international scholars, whose role is to set policies that govern its orientation and work system, evaluate its performance and specify the criteria for selecting the beneficiaries.
The program has achieved its objectives by the sheer number of applications, which exceeded 900 applications over the period 1997-2013. The program has granted 107 fellowships for academicians from 14 Arab countries and in a wide spectrum of specialization including Physics, Chemistry, Engineering, Mathematics, Biology, Medicine, in addition to several fields of social sciences and humanities. The fellowships have been implemented in some of the top-rated universities and research institutions in the world.
The program has had other benefits, including the interaction of beneficiaries with internationally-renowned experts who oversaw their research in the host institutions, and the opportunity provided to some beneficiaries to work with distinguished scientists and Nobel laureates in their respective fields, and to work in the best international scientific laboratories in various fields. The program also enabled the beneficiaries to contribute to the application of scientific experiments on the reality of their countries, and to publish the results of their research in the most prestigious scientific journals. It also contributed to the increase of the degree of cooperation between scientific institutions of the host and original institutions. The program continues to be implemented annually with a growing number of applicants, from all member countries, who want to benefit from it.
Annual Report 2013 31
Third: Other Activities 1- Coordination between the Arab National and Regional Development Institutions
The Arab Fund continued to act as the Coordination Secretariat of the Coordination Group, which includes the Arab national and regional development institutions, and prepare their periodic meetings. The twelfth meeting of the Heads of these institutions took place on March 17, 2013, at the Arab Fund headquarters in Kuwait. The Qatar Development Fund, which recently joined the Coordination Group, attended this meeting. During their meeting, the heads of the institutions discussed many topics relating to the Group’s activities and its relationships with international and regional institutions, as well as its developmental role in light of the changes taking place in Arab countries and in the field of development. In this respect, the Heads of the institutions reaffirmed their willingness to continue their efforts to support Arab countries going through a transition period, by determining priorities and appropriate measures to finance projects proposed by the countries concerned. Furthermore, in order to face the challenges posed by the issues related to sustainable development and the role that the Coordination Group can have toward its achievement, an agreement was reached during the meeting to set up a framework for the Group’s activities in light of the variables related to regional integration, economic effectiveness, employment, environment, food security, in addition to providing modern energy services.
The seventy second Coordination Group meeting took place during the period 4 - 8 October, 2013, at the Arab Fund headquarters with the participation of several international institutions, including the World Bank, the Japan International Cooperation Agency, the European Bank for Reconstruction and Development, and ICARDA. The meeting aimed at studying and discussing ways to strengthen and expand cooperation, to include employment and the water sector, in addition to other areas such as those related to promoting investments between countries of the south to support regional cooperation, and supporting small and medium enterprises in Arab countries, through improving the business environment, supporting the capacities of financial institutions to ensure sustainable financing for small and medium enterprises, and developing commercial activities, by providing technical assistance and credit lines.
The seventh meeting to strengthen cooperation in the area of Finance and Trade guarantees took place on September 5, 2013, at the headquarters of the Arab Bank for Economic Development in Africa, in Khartoum, Sudan. During the meeting, the Coordination Group member institutions reaffirmed the importance of promoting cooperation between them, particularly in the areas related to co-financing, to ensure functional integration between these institutions according to their specialization and domain of activity. They also reaffirmed the importance of that cooperation in the area of exports, to promote the export of goods of Arab origin to African markets and create trade ties with exporters and specialized entities within governments and the private sector, in order to set an action plan for cooperation in the areas of co-financing, guarantees and promotion of Arab exports, taking into consideration the exceptional circumstances prevailing in some Arab counties.
2- Special Account Management
By the end of the year, a total of 17 Arab countries had contributed to the Special Account,
32 Annual Report 2013
in addition to the Arab Fund, with total pledged contributions amounting to US Dollars 1308.0 million, of which US Dollars 967.5 million were paid.
Special Account projects were studied during the year in seven Arab countries, through evaluation of the needs of small and medium enterprises, and determination and choice of intermediaries qualified to borrow from the Special Account to finance these projects. In addition, visits were made to several institutions, both governmental and non-governmental, that work toward the development of small and medium enterprises, in order to inquire about their activities and their needs
Eight loans were approved during the year by the Special Account’s management committee, for a total amount US Dollars 293.0 million. These loans were provided to intermediary financial institutions in Yemen, Palestine, Sudan, Jordan, Tunisia, Mauritania and Oman. Table 5 shows the loan commitments by the Special Account during 2013. This brings the total number of loans approved by the management committee to 17, for a total amount of US Dollars 538.0 million.
Table 5
Loan Commitments Approved by the Special Account’s Management Committee During 2013
No. Country Institution
Amount of Loan
(Million US Dollars)
Date of Approval
1 Republic of Yemen Small Enterprise Development Fund 15 13/02/2013
2 Palestine Credit and Development Company “Faten” 8 13/02/2013
3 Republic of Sudan Government of Sudan 50 08/07/2013
4 Hashemite Kingdom of Jordan Government of Jordan 50 08/07/2013
5 Republic of Yemen Cooperative and Agricultural Credit Bank 50 22/12/2013
6 Islamic Republic of Mauritania Government of Mauritania 50 22/12/2013
7 Republic of Tunisia Bank for Financing Small and Medium Enterprises 20 22/12/2013
8 Sultanate of Oman Oman Development Bank 50 22/12/2013
Total 293
In order to coordinate efforts, expand the scope of activities and increase the effectiveness of its interventions to support the development of small and medium enterprises in Arab countries to provide employment opportunities and contribute to the reduction of poverty, the Special Account works at expanding its cooperation with entities that have experience in institutional and legislative support to small and medium enterprises. In this respect, the Special Account established, during 2013, cooperation and partnership with the World Bank, the International Finance Corporation and other institutions. As a result, joint appraisal missions with the World Bank were conducted to some Arab countries, and expertise, information and documents were exchanged.
Special Account representatives participated in several events in Arab countries on the
Annual Report 2013 33
development of small and medium enterprises, which enabled them to introduce the Special Account and its activities, and present ways in which to benefit from its operations. These events also provided opportunities to exchange views among participants on the best ways to develop small and medium enterprises in Arab countries, and to inquire about different experiences.
3- Study of Sudan Project to Achieve Food Security for the Arab World
The Arab Fund allocated a grant to conduct a study aimed at achieving food security for the Arab countries through the Sudan project. The grant was provided in implementation of the decisions of the Third Arab Economic and Social Development Summit, held in Riyadh, Kingdom of Saudi Arabia, in January 2013, and in response to a request from the Sudanese Government to have the Arab Fund help it conduct studies to formulate an integrated plan aimed at determining priorities and projects for achieving food security. The Arab Fund prepared the tender documents for the study, reviewed the offers submitted by several specialized consulting firms, selected the winning firm, and signed a contract with it. The study is expected to be completed by the end of 2014. The outcome of the study will include the following:
An estimation of the needs• of Arab countries for crops and main food products, and the food gap.An assessment of the capabilities and resources• available in Sudan, such as land, water, labor and other resources, that could help achieve food security, along with the infrastructure needed to meet this objective.Studying the feasibility of• producing crops and main food products in Sudan at competitive costs, and exporting them to Arab countries at competitive prices.Identifying and selecting priority projects, determining their feasibility, and identifying• additional studies needed to implement these projects, thus enabling the Sudanese Government to float the tenders for these projects for international bidding, all within suitable time frames and sectoral plans.
It is expected that this study, and the projects resulting from it, will help increase the utilization of water, land and human resources available in Sudan, and satisfy the increasing food needs in Arab countries.
4- Study of Pan-Arab Interconnection and Utilization of Natural Gas
Over the last three decades, the Arab Fund has allocated significant resources to finance electrical interconnection projects, whether between Arab electricity grids, or between the electrical grids of the Arab countries and those of neighboring European, Asian or African counties. The Arab Fund’s contributions in support of these projects date back to the early eighties, when it financed a comprehensive feasibility study including all Mashreq and GCC countries. This was followed by several studies, such as the study to connect the Mashreq Arab countries, the study to connect the GCC countries, and the study to connect Jordan with Egypt.
Since then, the contributions of the Arab Fund continued unabated. To date, it has provided 16 loans totaling over KD 261 million to finance electrical interconnection projects among eleven Arab countries, in addition to projects to interconnect the electrical grids of Arab
34 Annual Report 2013
countries with those of Spain, Turkey, Mali and Senegal. In addition, the Arab Fund financed numerous studies to enhance the performance of the transmission networks in various Arab countries.
The cost of generating electricity varies significantly from one Arab country to the other, mainly due to the availability of abundant quantities of natural gas in some countries, and lack thereof in others, thus creating good opportunities for energy trade. To capitalize on this situation and make better use of the electrical interconnections that have been constructed, and in an effort to develop an integrated master plan for upgrading the generation and transmission systems in the Arab countries, the Arab Fund allocated, in 2010, a grant to finance a study to determine the optimum path for every Arab country, and for all Arab countries combined, to attain the best utilization of available natural gas resources in the Arab world to meet the expected electric energy and power needs up to the year 2030.
The study, executed by a consortium of leading consulting firms, was completed in the fourth quarter of 2013. Its main results included developing a strategy for upgrading the electrical interconnection and natural gas pipelines in the Arab world during the period 2012 – 2030, in order to achieve the lowest overall cost for generating electricity during that period. The results also included identifying future electrical interconnection lines that need to be constructed, the ratings of these lines and the optimum time for them to enter into service, the determination of the natural gas pipelines and LNG facilities to be constructed, the rating and the optimum times for them to be operational, setting policies and guidelines for pricing the energy to be traded between the various countries, and a comparison between the different schemes for financing the various projects identified in the strategy. The final study report will be presented during a workshop to be held at the Arab Fund headquarters in January 2014.
5- Research Initiative for Arab Development
The main objective of the Research Initiative for Arab Development (RIAD), which is a partnership launched between the World Bank and the Arab Fund in 2008, is to help scale up and enhance the quality of economic research in the Arab world in order to inform developmental decision making and bridge the knowledge gap between academic research and the decision making process. The initiative focuses on six priority areas: (i) equity and inequality, (ii) regional integration, (iii) economic diversification, (iv) environmental degradation and climate change, (v) labor markets and human capital development and (vi) the political economy of transition to democracy in the Arab world.
Work under each theme is intended to inform researchers and decision makers, and help identify options for development policies. RIAD’s activities fall under the following headings: research activities and data initiatives, capacity building and training, and publications and the convening of workshops and conferences. Based on an agreement between the World Bank and the Arab Fund, the initiative is being implemented by the Economic Research Forum (ERF). The ERF’s governance structure is used to oversee the implementation of the initiative. A Scientific Committee and a Donors’ Committee were created to support the effective design and implementation of the initiative. Both the World Bank and the Arab Fund are represented in the two committees. The initiative was implemented in its first phase during the period 2009-2011, following
Annual Report 2013 35
which an independent evaluation was performed. Based on that evaluation, both the World Bank and the Arab Fund decided to extend their support to the initiative for an additional phase. The Arab Fund is overseeing RIAD’s activities through periodic follow-up reports as well as through attendance of the Scientific and Donors’ Committees meetings, which take place once a year during the month of June or July. The last meetings took place in Cairo, Egypt, on June 15, 2013. Research outcomes and other RIAD activities could be accessed through the ERF website at: www.erf.org.eg.
6- Funding of Studies on “Arab Integration” and “The Arab World in the Year 2025” in Cooperation with the Economic and Social Commission for Western Asia
The Arab Fund allocated a KD 300 thousand grant as a contribution toward the preparation of two studies: the first on “Arab Integration” and the second on “The Arab World in the Year 2025”, in cooperation with the Economic and Social Commission for Western Asia (ESCWA) based on a request by its executive Secretary. The first study will address the subject of Arab integration from the perspective of its relationship to economic and social development in the Arab region, and its impact on the development performance of the Arab countries. The second study aims at exploring the Arab future by analyzing a number of interrelated “scenarios”, which take into account the current situation in the Arab world and its future prospects, in order to assist decision makers and civil society in the policy choice that would favor the “optimal scenario”.
In the context of the study on Arab integration, the Arab Fund participated at the second meeting of the Advisory Board for the report of the study organized by ESCWA in Amman, Jordan, during the period September 3-5, 2013, to discuss the second draft of that report. The report is expected to be published upon revision of its second draft. In the context of the study on the Arab world in the year 2025, a committee charged with preparing the report was formed. The first draft of the report is expected to be prepared and discussed during 2014.
7- Preparation of the Joint Arab Economic Report
The Arab Fund annually participates in the preparation of the Joint Arab Economic Report, in cooperation with the General Secretariat of the League of Arab States, the Arab Monetary Fund and the Organization of the Arab Petroleum Exporting Countries. The Arab Fund contributes to the report with the chapters on economic and social developments, the agriculture and water sector, the industrial sector, and Arab developmental aid. The Arab Fund also prepares, on a rotating basis with the Arab Monetary Fund, the chapter that addresses the theme of the report. The theme of this year’s report was “Reinvigorating the Developmental Role of SMEs in Arab Countries”.
8- Various Activities
The Arab Fund continued to monitor the activities of the Arab Trade Financing Program in coordination with the Arab Monetary Fund, and through its membership on the Board of Directors. It also continued its cooperation with specialized Arab and international organizations in order to help improve the efficiency of their interventions in Arab countries.
36 Annual Report 2013
Fourth: Financial Statements for the Financial YearEnded 31 December 2013
I. Financial Position
Assets:
The value of assets increased in 2013 by KD 30 million (1%) compared to 2012 reaching KD 2,973 million, this increase was mainly in Loans and Cash & Cash equivalents as shown in the below schedule:
Variation20122013Assets
%KD Million%KD
Million%KD Million
2%11%401%41Cash & Cash Equivalents
(2)%(6)12%34111%335Investments
2%4885%2,514 87%2,562 Loans
(27)% (13)2%481%35Others Assets
1 %30100 %2,943 100 %2,973 Total
Liabilities:
The value of Liabilities increased in 2013 by KD 13.5 million (10%) compared to 2012 reaching KD 148.1 million, this increase was mainly in small & medium enterprises account as shown in the below schedule:
Variation 20122013Liabilities
%KD Million%KD
Million%KD Million
40%19.937%49.747%69.6Special Account for Financing Small & Medium Enterprises
(8)%(2.6)25%33.521%30.9Grants
5% 0.68%11.38%11.9Provision for Pension Fund
(11)%(4.4)30%40.124%35.7Other Liabilities
10 % 13.5100 %134.6100 %148.1Total
Member’s Equity:
The value of member’s Equity increased in 2013 by KD 16 million (1%) compared to 2012 reaching KD 2,825 million, this increase was translated by increase in the General &
Annual Report 2013 37
Additional Reserves as shown in the below schedule:
Variation20122013Members’ Equity
%KD Million%KD
Million%KDMillion
25%50071% 2,00088% 2,500Share Capital
1%39%2439%246General Reserve
(86)%(485)20%5613%76Additional Reserve
(2)0%50%3Other Reserves
1 % 16100 % 2,809100 % 2,825Total
II. Income & Expenditures
Income:Total Income for the year amounted to KD 87.1 million compared to KD 111.9 million in 2012, this decrease was mainly from interest income from loans because of inclusion of the arrears of Syrian’s loan interests & adjustment of the loan interests of Bahrain specialist hospital (private sector) as shown in the below schedule:
Variation20122013Income
%KDMillion% KD
Million%KDMillion
(26)%(24.2)81%91.477%67.2Interest Income from Loans
6% 1.218% 20.024% 21.2Gain from Investments
(271)%(1.9)1%0.7(1)%(1.2)(Loss)/Income from investment in Associate
50% 00%(0.2)0%(0.1)Other operating(Loss)/ Income
(22)%(24.9)100 %111.9100 %87.1Total
Expenditures:
Total Administrative Expenses for the year amounted to KD 8.1 million compared to KD 8.4 million in 2012, this decrease KD (0.3) million (4%) was in Other Expenses as shown in the below schedule:
Variation20122013Expenditures
% KDMillion%KD
Million % KDMillion
3% 0.272%6.077%6.2Staff Cost
(21)%(0.5)28%2.423%1.9Other Expenses
(4)%(0.3)100 %8.4100 %8.1Total
38 Annual Report 2013
Net Profit:
Total Net Profit for the year amounted to KD 33.5 million compared to KD 103.6 million in 2012, this decrease KD (70.1) million (68%) was a result of decreasing income from loans interest & inserting provision for Syrian loans as shown in the below schedule:
Variation20122013Net Profit
%KD Million
%KD Million
%KD Million
(24)%(24.5)103.679.1Net Profit before Provision
100%(45.6)0.0(45.6)Loans Provision
(68)%(70.1) 103.633.5Net Profit of the Year
III. Cash Flows
Net cash flow used in Operating Activities during the year amounted KD (47.5) million compared to KD (55.9) million for year 2012 as shown in the below schedule:
KD MillionCash Flows
Variation20122013
(16.5)(235.0)(251.5)Loans Disbursement
(1.7)(8.4)(10.1)Grants Disbursement
(6.9) 165.3 158.4Loans Repayments
(7.7)88.580.8Interest & Fees Received
24.7(57.1)(32.4)Net change in Investments
16.5(9.2) 7.3Other operating Cash Flows
8.4(55.9)(47.5)Net cash used in Operating Activities
IV. Financial Indicators of Arab Fund Performance
Variation20122013Financial Ratios
%%%
(2.4)%3.5%1.1%Net Income/ Assets
(2.5)%3.7%1.2%Net Income/ Member’s Equity
1.8%7.5%9.3%Expenditures/ Revenues
0.8%85.4%86.2%Loans/ Assets
1.2%89.5%90.7%Loans/ Member’s Equity
Annual Report 2013 39
Arab Fund for Economic and Social DevelopmentStatement of Financial Position
As at 31 December 2013 (KD 000)
2013 2012
AssetsCash and cash equivalents 41,174 40,255
Investments 286,129 290,796
Investment in associate 49,214 50,328
Loans 2,561,474 2,513,957
Receivables from participants in the building 7,023 7,369
Other assets 27,842 40,548
Total assets 2,972,856 2,943,253
Liabilities and members’ equity
LiabilitiesSpecial account for financing small and medium enterprises 69,546 49,692
Grants 30,902 33,544
Provision for pension fund 11,946 11,280
Other liabilities 35,674 40,105
Total liabilities 148,068 134,621
Members’ equity Share capital 2,500,000 2,000,000
General reserve 246,207 242,856
Additional reserve 76,389 561,275
Grants reserve 3,752 6,641
Change in the fair value reserve (1,560) (2,140)
Total members’ equity 2,824,788 2,808,632
Total liabilities and members’ equity 2,972,856 2,943,253
40 Annual Report 2013
Arab Fund for Economic and Social DevelopmentStatement of Comprehensive IncomeFor the year ended 31 December 2013
(KD 000)
2013 2012
Income
Interest income from loans 67,229 91,350
Net gains from investments 21,193 19,669
Interest income from short term deposits and call accounts 38 284
Share in result from an associate (1,268) 718
Operating expenses (46) (25)
Net income 87,146 111,996
Administrative expenses
Staff costs 6,137 6,040
Other expenses 1,925 2,339
Total administrative expenses 8,062 8,379
Net Income before provision for loans 79,084 103,617
Provision for loans (45,571) 0
Net profit for the year 33,513 103,617
Other comprehensive income
Net change in fair value for investments available for sale 580 189
Net amount transferred to profits or losses 0 13
Other comprehensive income / (losses) for the year 580 202
Total comprehensive income for the year 34,093 103,819
Annual Report 2013 41
Arab Fund for Economic and Social DevelopmentStatement of Changes in Members’ Equity
For the year ended 31 December 2013 (KD 000)
ShareCapital
General Reserve
Additional Reserve
Grants Reserve
Change in Fair Value
Reserve
Retained Earnings Total
Balance as at 1 January 2013 2,000,000 242,856 561,275 6,641 (2,140) 0 2,808,632
Profit for the year 0 0 0 0 0 33,513 33,513
Other comprehensive income for the year 0 0 0 0 580 0 580
Total comprehensive income for the year 0 0 0 0 580 33,513 34,093
Transferred to Capital 500,000 0 (500,000) 0 0 0 0
Transferred to support people of Palestine 0 0 (10,362) 0 0 0 (10,362)
Transferred to Arab Academic Fellowship 0 0 0 0 0 (168) (168)
Balance as at 31 December 2012 2,000,000 242,856 561,275 6,641 (2,140) 0 2,808,632
42 Annual Report 2013
2013 2012
Operating Activities
Profit for the year 33,513 103,617
Adjustments:
Interest income from loans (67,229) (91,350)
Unrealized Profits from investments (11,068) (12,572)
Interest income from term deposits and call accounts (38) (284)
Share in results from an associate 1,268 (718)
Provision for Loans 45,571 0
Provision for pension fund 1,625 1,585
3,642 278
Changes in operating assets and liabilities
Net change in trading investments (32,417) (57,065)
Disbursements of loans (251,463) (235,027)
Loan’s repayments 158,375 165,326
Disbursements of grants (10,049) (8,356)
Receivables from participants in the building 346 345
Other assets (84) 188
Special account for financing small and medium enterprises 19,854 1,291
Other liabilities (14,793) (8,999)
Cash flows used in operations (126,589) (142,019)
Interests received 80,057 87,255
Provision for pensions and employees’ end of service indemnity paid (959) (1,135)
Net cash flows used in operating activities (47,491) (55,899)
Investing activities
Net changes in other investments 48,410 73,829
Net cash flows from investing activities 48,410 73,829
Increase in cash and cash equivalents 919 17,930
Cash and cash equivalents at the beginning of the year 40,255 22,325
Cash and cash equivalents at the end of the year 41,174 40,255
Arab Fund for Economic and Social DevelopmentStatement of Cash flows
For the year ended 31 December 2013 (KD 000)
Annual Report 2013 43
Arab Fund for Economic and Social DevelopmentIndependent Arab Regional Financial Organization - Kuwait
Significant Accounting Policies
a) Statement of complianceThe financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS’s”) promulgated by the International Accounting Standards Board (“IASB”) and based on the interpretations issued by the International Financial Reporting Interpretations’ Committee of the IASB.
b) Basis of measurementThe financial statements are prepared on a fair value basis for financial assets and liabilities held for trading and assets available for sale, except those for which a reliable measure of fair value is not available. Other financial assets and liabilities and non-financial assets and liabilities are carried at amortized cost or historical cost.
The financial statements have been presented in Kuwaiti Dinars which is the functional and reporting currency of the Fund. All values are rounded to the nearest thousands (KD 000’), except when otherwise indicated.
c) Investments Financial assets and liabilities are classified at fair value through profit or loss when the assets or liabilities are managed, evaluated and reported on a fair value basis.
Financial instruments are measured initially through profit or loss at fair value. Transaction cost on financial instruments expensed through profit or loss immediately. Subsequent to initial recognition, all instruments measured at fair value through profit or loss are re-measured at fair value with changes in their fair value recognized in the profit or loss.
Investments which are not held to maturity or financial assets at fair value through profit or loss are classified as available for sale and are stated at fair value, with any resultant gain or loss being recognized directly in equity, except for impairment losses and, in case of monetary items, foreign exchange gains and losses.
d) LoansLoans are recognized at amortized cost less the impairment provision. The impairment provision is estimated when the full collections of loans is no longer probable. The amount of provision is determined as the difference between the carrying amount and the recoverable amount of the asset. The recoverable amount is calculated on the basis of the present value of the expected future cash flows, discounted at the loan’s original effective interest rate. Short-term balances are not discounted.
e) ImpairmentAn assessment is made by the Fund at each reporting date to determine whether there is objective evidence that a financial asset or group of financial assets is impaired. All impairment losses are recognized in the profit or loss.
44 Annual Report 2013
f) Investment in associateThe associate is an entity in which the Fund has significant influence, but not control, over the financial and operating policies. The investment in the associated entity is equity accounted.
g) Fixed assetsFixed assets are not capitalized but are fully written off to the statement of comprehensive income in the year of purchase.
h) Provision for pension fundThe Fund has a defined end of service benefit plan (pension plan) which covers all its employees. Provision for the Fund’s obligation towards employees’ pension is determined based on contributions paid by the employees’ and the Arab Fund, in addition to a return of 10% p.a. guaranteed by the Arab Fund.
i) Foreign CurrenciesTransactions in foreign currencies are initially recorded by the Fund at their respective functional currency spot rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Differences from adjustment of the monetary items are recognized in profit or loss.
j) Cash and cash equivalentsCash comprises of cash on hand and in banks, cash equivalents comprise bank balances and short term deposits.
k) Revenue recognitionInterest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset or a shorter period where appropriate, to the net carrying amount of the financial asset. Interest and commission on loans to countries with unpaid past due interest for over three months are excluded from the profit and loss and only recorded as income when received. Interest income from time deposits and call accounts is recognized on a time proportion basis. Dividend income is recognized when the right to receive payment is established. Fees and commission income is recognized when earned.
Annual Report 2013 45
ANNEXES
Annual Report 2013 47
Annex 1
Project Sheets for Loans Extended During the Year 2013
48 Annual Report 2013
ANNEx 1PROJECT 1 OF 18
Republic of SudanLoan Program for Industrial Development Projects
Loan No.: 586 Interest Rate: 2.5%
Beneficiary:Industrial Development Bank (IDB)
Grace Period: 5 years
Project Cost: KD 20.0 million Maturity: 25 years
Amount of Loan: KD 10.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 02/01/2013
First Installment: 5 years following the first disbursementDate of
Effectiveness:
Objectives:
The program aims at providing financing to industrial projects and enterprises in the private sector, which will contribute to the creation of new jobs that will help fight unemployment and reduce poverty, in addition to the substitution of imports, or the manufacture of products from local raw materials or intermediate products, in order to increase gross domestic product and value added, and provide foreign exchange.
Description:
The program consists of providing loans for selected industrial development projects through IDB. The loans will be used for acquisition of machinery, equipment, means of transportation and communication, spare parts, systems, programs and other services needed for the establishment of new projects or the expansion of existing ones in the field of manufacturing industries. The program includes loans to: an animal feed plant, an ethanol production project, a paper production project, an organic fertilizer manufacturing project, a leather tannery project, and a vegetable oil extraction project. The program also consists of improving IDB’s performance and activities through institutional support which includes consultancy services, studies, software systems and training, in addition to other tools needed to improve performance.
Financing:
The Arab Fund’s loan covers about 50% of the total program cost, and IDB covers about 37% of that cost. The beneficiaries from the loans will contribute to the remaining program cost, and IDB will cover any additional cost that may arise.
Annual Report 2013 49
ANNEx 1PROJECT 2 OF 18
Kingdom of MoroccoWater Supply to Tetouan Area
Loan No.: 584 Interest Rate: 3.0%
Beneficiary:National Office of Electricity and Potable Water
Grace Period: 4 years
Project Cost: KD 9.5 million Maturity: 22 years
Amount of Loan: KD 7.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 31/01/2013
First Installment: 4 years following the first disbursementDate of
Effectiveness: 21/07/2013
Objectives:
The project aims at covering the expected shortage in the supply of drinking water in the Tetouan area, and meeting its future needs until 2030. This will be accomplished by using part of the water that will be provided by Wadi Martil dam. The project will also provide water to the new touristic, commercial and industrial zones that will be created in the area, as well as to a number of villages located near the project facilities.
Description:
The project, which is expected to be completed by the second quarter of 2016, includes the construction of a pumping station and a water treatment plant, the laying of pipelines to transport water, in addition to technical and consultancy services. The project consists of the following main components:
1. Pumping Station and Water Treatment Plant: This includes civil works needed for the construction of a water pumping station with a capacity of about 2600 l/s, at a height of about 102 m, and equipping it with pumps with a total capacity of about 1300 l/s, as well as performing all electrical and hydro-mechanical works necessary to operate the station. This component also includes the construction of a reservoir for balancing the water with a capacity of about 3500 m3, the construction of a water treatment plant, near Toreeta plant, with a capacity of about 500 l/s, and the installation of a complete system for monitoring and operating all the project facilities.
2. Water Pipelines: This includes the laying of pipelines to pump and transport water, with a total length of about 15 km and diameters ranging between 1000 and 1300 mm.
3. Technical Services: This includes consultancy services needed to prepare studies and design, bid analysis and project supervision.
Financing:
The Arab Fund’s loan covers about 74% of the total project cost. The Moroccan Government will cover the remaining cost of the project and any additional cost that may arise.
50 Annual Report 2013
Islamic Republic of MauritaniaDevelopment of Power Generating Stations
for Interior Cities
Loan No.: 588 Interest Rate: 2.5%
Beneficiary: SOMELEC Grace Period: 7 years
Project Cost: KD 3.2 million Maturity: 25 years
Amount of Loan: KD 3.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 03/02/2013
First Installment: 7 years followingthe first disbursement Date of
Effectiveness: 11/06/2013
Objectives:
The project aims at satisfying the rising demand for electric power in about 30 interior cities until the year 2020. This will be accomplished by increasing the installed generation capacity through adding new generating units, and rehabilitating the existing power stations.
Description:
The project, which is expected to be completed in the third quarter of 2015, includes the acquisition and installation of generating units and auxiliaries, and the acquisition of transportation means, cranes, fuel trucks and spare parts. The project also includes civil works for new units, and the rehabilitation and maintenance of a number of existing generating units, in addition to consultancy services. The project consists of the following main components:
1. Generating Units: This includes the acquisition and installation of approximately 31 generating units with capacities of approximately 250 kW, 500 kW and 800 kW, and their mechanical and electrical accessories, auxiliaries, control and protection systems, and spare parts.
2. Installation, Rehabilitation and Maintenance Works: This includes transportation and installation of new generating units, rehabilitation of a selected set of existing units, renovation of control systems, and acquisition of spare parts needed for protective and emergency maintenance, in addition to establishing a central workshop, equipping it with tools and supplying it with transportation means, cranes and fuel tankers.
3. Civil and Renovation Works: This includes civil works for new units, in addition to the maintenance and restoration of existing generating units.
4. Consultancy Services: This includes consultancy services for assistance in bid evaluation, contract proceedings and work supervision.
Financing:
The Arab Fund’s loan covers about 94% of the total project cost. The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
ANNEx 1PROJECT 3 OF 18
Annual Report 2013 51
Hashemite Kingdom of Jordan Al-Samra Electric Power Generating Station
(Phase VI)
Loan No.: 587 Interest Rate: 3.0%
Beneficiary:Al-Samra Electric Power Generating Company
Grace Period: 4 years
Project Cost: KD 31.9 million Maturity: 22 years
Amount of Loan: KD 30.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 11/02/2013
First Installment: 4 years followingthe first disbursement Date of
Effectiveness: 04/03/2013
Objectives:
The project aims at satisfying the increasing demand for electric power and energy in the Kingdom starting in the summer 2013, especially in light of the unexpected increase in loads on the national grid due to the arrival of a large number of immigrants to the country as a result of the political situation in the region, and at substituting the energy being imported from the Egyptian grid, which is expected to drop sharply due to the lack of surplus in the Egyptian generating system. This will be accomplished through the expansion of the Al-Samra power generating station by adding a 140 MW gas turbine.
Description:
The project, which is expected to enter into service in the beginning of the third quarter of 2013, consists of the following main components:
1. Station Expansion Works:
a. Civil Works: This includes levelling of land, paving of roads, and laying of foundations for equipment and buildings included in the project site, along with constructing a building to house the control system for the gas turbine.
b. Gas Turbine: This includes the supply and installation of a 140 MW outdoor type gas turbine, using natural gas as primary fuel and LFO as secondary fuel, and cooling, control and speed regulation equipment, along with the supply and installation of a 200 MVA, 15 kV rated electrical generator and its auxiliaries.
c. Main Circuit Breaker: This includes the supply and installation of a 6,000 A, 15 kV, main circuit breaker, with the necessary measurement and protection equipment.
d. Power Transformer: This includes the supply and installation of a 200 MVA, 15/132 kV, power transformer to connect the gas turbine to the 132 kV transmission network.
ANNEx 1PROJECT 4 OF 18
52 Annual Report 2013
e. Auxiliary Mechanical Works: This includes the supply and installation of pumps, water tanks, fuel and natural gas systems inside the station, firefighting systems, along with test, maintenance and other equipment.
f. Electrical Works inside the Station: This includes the supply and installation of the balance of the circuit breakers and power transformers, the cables and auxiliary transformers, rated at 15 kV and below, the measurement, protection and control equipment, along with the distribution network inside the station.
g. Control System: This includes the system for controlling the gas turbine.
h. Spare Parts: This includes the supply of spare parts for the gas turbine and its auxiliaries, for a period of 2 years.
2. Consultancy Services: This includes providing all consultancy services required
for preparing design drawings, assisting in the tendering process, performing project supervision, participating in witness testing and preliminary acceptance of equipment included in the project.
Financing:
The Arab Fund’s loan covers about 94% of the total project cost. The Al-Samra Electric Power Generating Company will cover the remaining cost of the project and any additional cost that may arise.
ANNEx 1PROJECT 4 OF 18
Annual Report 2013 53
ANNEx 1PROJECT 5 OF 18
Republic of SudanUpper Atbara and Setit Dams Complex
(Supplementary Loan)
Loan No.: 591 Interest Rate: 2.5%
Beneficiary: Dams Implementation Unit Grace Period: 5 years
Project Cost: KD 512.6 million Maturity: 25 years
Amount of Loan: KD 30.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 18/03/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at regulating and exploiting the Upper Atbara and Setit rivers’ water by constructing two interconnected dams at Rumela and Burdana sites, and a hydroelectric power plant, to help the development of the Eastern Region of the Republic of Sudan, through boosting the agricultural production, expanding the hydroelectric power generation capacity, as well as increasing the supply of drinking water. The additional water regulated by the dams’ reservoir will be used to intensify the existing agricultural production for 190 thousand hectares in the New Halfa area, presently irrigated from Gashm El-Girba dam, to develop irrigated agriculture for 280 thousand hectares in the Upper Atbara area, to generate electricity, estimated annually at 843 GWh, and to supply drinking water to the city of Gadaref and neighbouring villages.
Description:
The project, which is expected to be completed at the end of the third quarter of 2016, consists of the following main components:
1. Rumela and Burdana Dams: This includes the construction of two interconnected dams with a total crest length of 13 km, and a hydroelectric power plant in a site located 80 km south of the existing Gashm El-Girba dam on the main Atbara river. The two dams will impound a reservoir with a storage capacity of 3.7 billion m3. This component includes:
a. Construction of Rumela Dam: This includes the construction of an earth fill dam and its appurtenant structures on the Upper Atbara river, consisting of an impervious core earth fill dam section across the river, and two homogenous earth fill sections in the river banks with an earth fill dyke in the left bank. The dam, including the dyke, has a crest length of 6.4 km and a width of 10 m, and a maximum height of 55 m above the foundation. The appurtenant structures include a spillway
54 Annual Report 2013
with bottom outlet, a water intake and a hydroelectric power plant, as well as an additional water intake. The construction of the dam includes preparatory, civil and hydromechanical works.
b. Construction of Burdana Dam: This includes the construction of an earth fill dam and its appurtenant structures on the Setit river, consisting of an impervious core earth fill dam section across the river, and two homogenous earth fill sections in the river banks with an earth fill dyke in the right bank. The dam, including the dyke, has a crest length of 6.6 km and a width of 10 m, and a maximum height of 50 m above the foundation. The appurtenant structures include a spillway with bottom outlet. The construction of the dam includes preparatory, civil and hydromechanical works.
2. Hydroelectric and Electric Works: This includes the acquisition and installation of a 320 MW hydroelectric power plant consisting of 4 identical vertical Kaplan turbines, with a rated capacity of 80 MW each and an average head of 34 m, a flow rate of 250 m3/s, four generators, power transformers and an auxiliary transformer, a 220 kV switchyard, and measurement, protection, and control systems, and other auxiliaries and accessories. It also includes acquisition and installation of equipment needed for evacuating the generated power through a double circuit 220 kV transmission line, 28 km long, to Al-Showak substation.
3. Technical Services: This includes consultancy services required to review previous studies and designs, preparation of detailed design and construction drawings for Rumela and Burdana dams with the two power plants, as well as supervision of project construction.
4. Land Expropriation and Resettlement: This includes land acquisition, compensation for properties, and resettlement of 138 thousand inhabitants affected by the construction of the project.
5. Project Management: This includes the establishment of a project management unit within the Dams Implementation Unit, which will administer the implementation of the project.
Financing:
The supplementary loan, along with the previous two Arab Fund’s loans (No. 557/2010 and No. 566/2011) cover about 22% of the total project cost. The Government of Algeria, the Kuwait Fund for Arab Economic Development, the Saudi Fund for Development, the Islamic Development Bank and the OPEC Fund for International Development, contributed to the financing of the project with loans equivalent to about KD 175 million, representing about 34% of the total project cost. The Government of Sudan will cover the remaining cost of the project and any additional cost that may arise.
ANNEx 1PROJECT 5 OF 18
Annual Report 2013 55
ANNEx 1PROJECT 6 OF 18
Republic of YemenSanitary Networks in Sana’a
(Phase IV)
Loan No.: 589 Interest Rate: 2.5%
Beneficiary:Sana’a Water and Sanitation Local Corporation (SWSLC)
Grace Period: 5 years
Project Cost: KD 18.5 million Maturity: 25 years
Amount of Loan: KD 15.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 20/03/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness: 29/04/2013
Objectives:
The project aims at improving the health status of the inhabitants of some areas in Sana’a City through the construction of sanitary networks. This will eliminate the environmental problems associated with the flow of raw wastewater to residential and commercial areas and to roads. In addition, the project will reduce the spread of water-related diseases and improve the appearance of the capital city.
Description:
The project, which is expected to be completed by the end of 2016, consists of the following main components:
1. Construction of Sanitary Networks: This includes the supply and installation of major and minor pipelines, and the ancillary equipment needed to collect and transport the raw wastewater from the areas of Asser, Alsuneneh, Omer Ben Abdelaziz, Aljarda’, Kaa’Aljarda’, Rawda and the area east of the airport, in addition to the construction of networks at other sites in Sana’a requiring quick remedial action.
2. Technical Services: This includes the supervision of construction of the networks and the hiring of experts to support the project management unit within the SWSLC.
Financing:
The Arab Fund’s loan covers about 81% of the total project cost. The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
56 Annual Report 2013
Arab Republic of EgyptModernization of the Signaling System on the Benha - Zagazig - Ismailia - Port Said Corridor
Loan No.: 583 Interest Rate: 3.0%
Beneficiary:Egyptian National Railways (ENR)
Grace Period: 5 years
Project Cost: KD 80.5 million Maturity: 22 years
Amount of Loan: KD 44.0 million Repayment: 35 semi-annualinstallments
Date of Loan Agreement: 02/04/2013
First Installment: 5 years following the first disbursement Date of
Effectiveness:
Objectives:
The project aims at raising the level of safety along the Benha - Zagazig - Ismailia - Port Said corridor (line), increasing the number of passenger trains passing on it, and the volume of freight it can handle. This will be accomplished by replacing the existing mechanical interlocking system with a more modern, centrally controlled, electrical interlocking system.
The project will improve the ability of the ENR system operators to control the movement of trains along the line, and coordinate the operation of the railroad crossings with the movement of the trains, thus reducing the minimum permissible time between trains and lowering the rate of traffic accidents.
Description:
The project, which is expected to be completed by the end of 2016, consists of the supply and installation of the signaling and telecommunications systems to safely manage the line, along with the necessary civil and mechanical works. The project also includes the provision of consultancy services required for the project, and institutional support needed to raise the efficiency of operations of ENR. The project consists of the following main components:
1. Signaling and Control System: This includes:
a. Central Control Center (CCC): This includes the supply and installation of all equipment necessary for the operation of the center, which will be constructed in the city of Zagazig and used to operate the entire line.
b. Local Control Towers (LCT): This includes the construction of 20 local control towers along the line, in order to control the operation of the various signaling
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ANNEx 1PROJECT 7 OF 18
equipment included in the project. The LCT’s will be connected to the CCC to enable operators, in the towers, to control the signaling equipment locally in case of failure of the CCC.
c. Telecommunications System: This includes the supply and installation of an integrated telecommunications system to connect the CCC with the various LCT’s.
d. Electrical Supply System: This includes the construction of an electrical system to feed the instruments and equipment located in the CCC and LCT’s, the telecommunications equipment, along with the signaling equipment located along the line.
e. Civil Works and Mechanical Equipment: This includes the construction of the CCC and LCT’s, civil foundations for the equipment, excavation works for the cables, along with the supply and installation of air conditioning and fire-fighting equipment.
2. Consultancy Services: This includes the supervision of project execution, equipment witness testing, and the preparation of feasibility studies for future projects to improve the efficiency of operations of ENR.
3. Institutional Support: This includes the supply and installation of equipment, and the design and supply of software programs necessary for modernizing the information systems of ENR, along with the upgrade of the technical capabilities of its staff through supplying its training facility with equipment, tools, software programs, references and periodicals.
Financing:
The Arab Fund’s loan covers about 55% of the total project cost. The Egyptian Government is coordinating with several Arab financial institutions to cover most of the gap in financing the project. It will then cover the balance of the project cost and any additional cost that may arise.
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ANNEx 1PROJECT 8 OF 18
Islamic Republic of Mauritania Construction of a 30 MW Wind Farm in Nouakchott
Loan No.: 590 Interest Rate: 2.5%
Beneficiary: SOMELEC Grace Period: 7 years
Project Cost: KD 17.3 million Maturity: 25 years
Amount of Loan: KD 14.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 02/04/2013
First Installment: 7 years followingthe first disbursement Date of
Effectiveness: 02/06/2013
Objectives:
The project aims at meeting the increasing demand for power and energy in the city of Nouakchott and its suburbs, without using fossil fuel. This will be accomplished through the construction of a 30 MW wind farm in the city, and connecting it to the local transmission network.
Description:
The project, which is expected to be completed in the second quarter of 2015, includes the supply and installation of low voltage (LV) wind turbines, with a total capacity of 30 MW, and transformers to raise the generated voltage to 33 kV, the construction of a 33 kV substation, the laying of 33 kV cables to connect the generating units to the substation, and the substation to the 33 kV local transmission network, along with the provision of the necessary consultancy services and institutional support. The project includes the following main components:
1. Wind Farm:
a. Turbines: This includes the supply and installation of 15 wind turbines, each rated at 2 MW, and 15 transformers from LV to 33 kV.
b. Civil Works: This includes the construction of tower footings, buildings and an internal road network.
c. Electrical Works: This includes the supply and installation of a 33 kV substation containing measurement, protection and control equipment, and laying of 33 kV cables to connect the turbines to the substation.
d. Electrical Interconnection Works: This includes the laying of 33 kV cables
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ANNEx 1PROJECT 8 OF 18
between the wind farm and each of the Arafat substation and the West substation, in order to connect the wind farm to the local transmission network.
2. Consultancy Services: This includes providing the consultancy services necessary to assist SOMELEC in contractual procedures, review of design drawings, project supervision, equipment witness testing and project acceptance.
3. Institutional Support: This includes training of SOMELEC employees and conducting studies, in addition to the acquisition, delivery and installation of computers, systems and printers.
Financing:
The Arab Fund’s loan covers about 81% of the total project cost. The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
60 Annual Report 2013
ANNEx 1PROJECT 9 OF 18
Islamic Republic of MauritaniaNéma – Mali Border Road
(Section III)
Loan No.: 593 Interest Rate: 2.5%
Beneficiary:Ministry of Equipment and Transport
Grace Period: 7 years
Project Cost: KD 10.3 million Maturity: 25 years
Amount of Loan: KD 9.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 02/04/2013
First Installment: 7 years followingthe first disbursement Date of
Effectiveness: 11/09/2013
Objectives:
The project aims at developing the transport services on the main road network of the country, and insuring traffic safety. The project also aims at promoting trade between different regions of the country, and between Mauritania and its neighboring countries, through the completion of the connecting road between the city of Néma and the borders of Mali. The project is expected to contribute to the development of areas adjacent to the road, integrate isolated localities and improve their access to basic services.
Description:
The project, which is expected to be completed by the end of 2016, constitutes the third section of the connecting road between Néma and the borders of Mali, as the first and second sections are being implemented. It comprises of the construction and paving of the road that extends between the cities of Bassiknou and Fassala, of a total length of approximately 64 km, with two lanes, one in each direction with a width of 3.5 m, and shoulders, each with a width of 1.5 m. The project also consists of the consultancy services necessary for the supervision of the implementation. The project includes the following main components:
1. Civil Works: This includes all the civil and construction works needed to construct the asphalt road, including all excavation and backfill, the construction of pavements and paving, the drainage facilities, all the necessary complementary works to ensure traffic safety, in addition to road protection works and quicksand stabilization.
2. Consultancy Services: This includes consultancy services necessary for review of the design, and supervision of project implementation.
Financing:
The Arab Fund’s loan covers about 87% of the total project cost. The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
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ANNEx 1PROJECT 10 OF 18
Republic of TunisiaMdhila 2 Triple Super Phosphate Fertilizer Production
Loan No.: 592 Interest Rate: 3.0%
Beneficiary: Groupe Chimique Tunisien (GCT) Grace Period: 4 years
Project Cost: KD 114.8 million Maturity: 22 years
Amount of Loan: KD 22.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 19/06/2013
First Installment: 4 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at increasing the production of high value fertilizer in Tunisia, and reducing the emissions of harmful gasses and dust resulting from the transfer and conversion of phosphate ore into triple super phosphate (TSP) fertilizer. This will be accomplished through the construction of a new production plant in Mdhila. The project also aims at utilizing the thermal energy resulting from the manufacturing process to generate electricity, providing new employment opportunities, and improving the economic situation in the project area.
Description:
The project, which is expected to be completed by the end of the second quarter of 2015, comprises of all the civil works necessary for the preparation and processing of the site, as well as the supply, installation and operation of sulfuric acid, phosphoric acid and TSP fertilizer production units. It also includes the equipment and supplies needed to utilizing the resulting energy from the manufacturing process to generate electricity and to reduce emission of harmful gases and dust. The project also includes basic services, storage units, maintenance workshops and buildings, and the necessary consultancy services for the design of the project, the supervision of its implementation, as well as the training of the employees. The project includes the following main components:
1. Civil Works and Shared Facilities: This includes the works necessary for the preparation of the site and the construction of the buildings, facilities, service networks, storage units and workshops.
2. Production Units:
a. A sulfuric acid production unit with a daily capacity of 1,800 tons, and a 22 MW electric generating unit which utilizes the thermal energy resulting from the manufacturing process.
62 Annual Report 2013
b. A phosphoric acid production unit with a daily capacity of 600 tons, and a retrieval line for the fluorine gas.
c. A TSP fertilizer production unit with an annual capacity of 380 thousand tons, and equipment for the transport, storage and shipping of the fertilizer.
3. Institutional Support and Training:
a. The necessary consultancy services for the design of the project, the supervision of its implementation, and trial operation.
b. The training of employees in the area and the development of their capabilities.
Financing:
The Arab Fund’s loan covers about 19% of the total project cost. The European Investment Bank contributes to the financing of the project with a loan equivalent to about KD 53 million (about 46%). The GCT will cover the remaining cost of the project and any additional cost that may arise.
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ANNEx 1PROJECT 11 OF 18
Islamic Republic of MauritaniaNew Nouakchott International Airport
Loan No.: 595 Interest Rate: 2.5%
Beneficiary:Ministry of Equipment and Transport
Grace Period: 7 years
Project Cost: KD 211.9 million Maturity: 25 years
Amount of Loan: KD 9.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 09/07/2013
First Installment: 7 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at developing air transport in Mauritania and accommodating national and international flights through the construction of a new international airport in Nouakchott able to handle the increasing demand for air transport. This project will help stimulate the economic and social development of the country.
Description:
The project, which is expected to be completed during the second quarter of 2015, includes the construction of the airport infrastructure in accordance with the principles, regulations and standard specifications of the International Civil Aviation Organization, in order to accommodate all types of aircraft, specifically Airbus 380 and Boeing 747. The airport will have a maximum annual capacity of around two million travelers. The project includes the following main components:
1. Runways, Taxiways, Aprons and Service Roads: This includes the civil works necessary to construct two runways for landing and takeoff, one as the main runaway and designed to accommodate all types of aircraft, with a length of 3,400 m and a width of 60 m, and the other as a secondary and reserve runaway, with a length of 2,400 m and a width of 45 m. This component also includes taxiways parallel to the main runaway and aprons, as well as service roads inside the airport and parking for buses and cars outside the airport.
2. Main Terminal and Airport Services Buildings:
a. Main Terminal: This includes the construction and architectural works for the 20,000 m2 main terminal, comprising equipping the arrival and departure halls for passengers and air cargo, supplying and installing the necessary equipment and devices, halls for the airline companies to process passengers, luggage handling
64 Annual Report 2013
equipment and the necessary equipment to manage the terminal according to international standards. The terminal will also include spaces for commercial outlets such as restaurants and shops, which will be prepared at a later stage of the project’s execution.
b. Airport Service Buildings: This includes the construction of an air traffic control
tower, a fire fighting station and maintenance workshops for the mechanical equipment at the airport. This component also includes the construction of a presidential building, a cargo terminal and an aircraft station.
3. Air Navigation Devices: This includes the supply and installation of all necessary devices for air navigation, communication, meteorology and air traffic control. This component also includes the supply and installation of devices for the runaways and taxiways, electrical generators, transformers and an electricity distribution network.
4. Other Equipment:
a. Airport Operation Facilities: This includes the supply and installation of all necessary equipment and devices needed to operate the airport and ensure both land and air navigation safety.
b. Public Utilities: This includes the construction of a road to connect the airport to the main road network, the supply of electricity, and the establishment of the communication, water and sewerage networks.
5. Technical and Consultancy Services: This includes the necessary services for the preparation of studies, designs and tender documents, assistance to the project implementation unit in selecting contractors and suppliers, as well as supervision of project implementation.
Financing:
The Arab Fund’s loan covers about 4% of the total project cost. A private company which has been set up in order to finance and execute this project, will be providing the equivalent of about KD 193.6 million (about 91%). The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
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ANNEx 1PROJECT 12 OF 18
Republic of DjiboutiRehabilitation of the Distribution Networks
of Drinking Water in Djibouti City
Loan No.: 598 Interest Rate: 2.5%
Beneficiary:Office National de l’Eau et de l’Assainissement de Djibouti (ONEAD)
Grace Period: 6 years
Project Cost: KD 11.1 million Maturity: 25 years
Amount of Loan: KD 10.0 million Repayment: 39 semi-annual installments
Date of Loan Agreement: 09/07/2013
First Installment: 6 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at addressing the severe drinking water shortage in Djibouti City, by rehabilitating and strengthening the water distribution network, expanding it, pumping additional groundwater into the network and rationalizing water consumption. The project is expected to provide around 2.1 million m3 annually of water. The project will also help develop the water distribution network, improve drinking water services, and thereby the living and health conditions of the population.
Description:
The project, which is expected to be completed during the third quarter of 2017, includes the rehabilitation of water distribution tanks, the rehabilitation and laying of pipelines, installation of house connections, construction of water pumping stations, drilling and equipping wells and connecting them to the distribution network, in addition to technical services and institutional support to ONEAD. The project consists of the following main components:
1. Rehabilitation of Water Distribution Network: This includes the rehabilitation of about 4 existing water distribution tanks with capacities ranging between 1,400 and 2,500 m3, replacement of approximately 80 km of pipelines with diameters ranging between 75 and 600 mm, and their accessories, as well as laying of approximately 95 km of pipelines with diameters ranging between 75 and 400 mm. This component also includes the replacement of approximately 16,500 existing house connections, as well as the installation of approximately 8,000 new connections. Two water pumping stations with variable speeds will also be constructed, each with a capacity of approximately 100 liters/second with a maximum height of 30 m. In addition, this includes drilling approximately 10 groundwater wells and equipping them with pumps, executing the necessary electrical and hydro-mechanical works for their operation, and laying about 10 km of pipelines with diameters ranging between 110 and 250 mm to connect them to the distribution network.
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2. Technical Services: This includes consultancy services required to prepare the studies and design of the project, tender documents, assisting in bid evaluation, and supervising the execution of the project.
3. Institutional Support: This includes establishing a workshop for repairing water meters and maintaining pumps, purchasing equipment, and training workers in project administration, operation and maintenance. It also includes the services of experts and consultants to conduct required studies for the improvement of ONEAD’s management and financial system.
Financing:
The Arab Fund’s loan covers about 90% of the total project cost. The Government of Djibouti will cover the remaining cost of the project and any additional cost that may arise.
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ANNEx 1PROJECT 13 OF 18
Republic of YemenReconstruction of Abyan
Loan No.: 594 Interest Rate: 2.5%
Beneficiary: Abyan Reconstruction Fund Grace Period: 5 years
Project Cost: KD 11.2 million Maturity: 25 years
Amount of Loan: KD 10.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 11/07/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project, which is part of the emergency program for the reconstruction of areas affected by acts of sabotage and terrorism in the Governorate of Abyan, aims at repairing the damages caused to all facilities, services, and public and private infrastructure in the Governate, as well as providing assistance to the victims of those acts and the displaced, and alleviating the suffering they endured. The project also aims at accelerating the achievement of development and social goals in the Governorate.
Description:
The project, which is expected to be completed at the end of the first quarter of 2015, aims at renovating, rehabilitating or building technical, industrial and agricultural institutes, elementary schools, and the college of education in Abyan University, in addition to an agricultural research station, a cotton mill in the city of Al Kawd, a central complex for fruits, vegetables and meat in the city Lawdar, and a coeducation secondary school in the city of Jaar. The project includes all necessary civil and construction works, supplying and installation of equipment, as well as the consultancy services to prepare and execute the project. The main components of the project can be summarized as follows:
1. Civil Works and Supplies: This includes all civil, construction and electromechanical works necessary to renovate, rehabilitate, or build the damaged facilities included in the project. It also includes the supply and installation of classroom furniture and supplies, administrative offices, and all necessary equipment, machinery, and instruments for the laboratories and workshops.
2. Consultancy Services: This includes preparing the studies, designs and detailed
plans, the tender documents, as well as assistance in bid evaluation and project supervision.
Financing:
The Arab Fund’s loan covers about 90% of the total project cost. The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
68 Annual Report 2013
Republic of YemenEducational Hospital for Aden University
Loan No.: 596 Interest Rate: 2.5%
Beneficiary: Aden University Grace Period: 5 years
Project Cost: KD 21.0 million Maturity: 25 years
Amount of Loan: KD 18.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 11/07/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness: 29/12/2013
Objectives:
The project aims at supporting the health system in the Governorate of Aden, and improving its health services. In addition, the project aims at improving qualifications of students of the medical colleges, and supporting medical research at the university.
Description:
The project will help improve health services and raise the capabilities of medical students at Aden University, through the construction of an educational hospital with a capacity of about 400 beds. The project, which is expected to be completed by the end of 2016, consists of the following main components:
1. Hospital Construction and Equipment:
a. Buildings needed for health services, education and housing of employees, with all the required electrical and mechanical works.
b. General site works related to roads, parkings, electricity, communication, water, wastewater, waste treatment, and all other auxiliary works.
c. Equipment, that includes medical and non-medical equipment, and furniture.
2. Technical Services: These include the consultancy services needed to supervise the implementation of the project, the use of expert services to help the project implementation unit, in addition to training of local employees.
Financing:
The Arab Fund’s loan covers about 86% of the total project cost. The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
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Republic of YemenRehabilitation and Expansion of
Sana’a – Al Hudaydah Road
Loan No.: 597 Interest Rate: 2.5%
Beneficiary:Ministry of Public Works and Highways
Grace Period: 5 years
Project Cost: KD 104.1 million Maturity: 25 years
Amount of Loan: KD 30.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 11/07/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at developing transport between the capital Sana’a and the country’s main port in Al Hudaydah, by rehabilitating and expanding the road that links the two cities. This will reduce bottlenecks, accommodate the increasing traffic and allow for safer travel on this road, which is the main one in the national road network.
Description:
The project, which is expected to be completed at the end of the first quarter of 2016, includes the necessary works to rehabilitate and expand part of the road that stretches between the capital Sana’a and Al Hudaydah port. These works include digging, paving, bridge construction, protection works and traffic safety works. The length of the road subject to the works is about 139 km, and has been divided into two sections for design and implementation purposes. The first section stretches from Al Masajid area to Manakhah and is about 70 km long. The second section stretches from Manakhah to the Bajil – Al Sharq intersection, and is approximately 69 km long. The project also includes a diversion of about 14.6 km in Manakhah and the construction of a tunnel, around 70 km from the capital. In addition, the project includes the necessary technical services and expertise for the supervision of the works, and training of the local cadre. The main components of the project can be summarized as follows:
1. Road Rehabilitation and Expansion: This includes implementation of all the works related to the rehabilitation and expansion of part of the road, to create two lanes, each with a width of 7.5 m, and two shoulders, each with a width of 2.4 m. Works also include drilling, backfilling, pavements and asphalt paving. This component also includes construction of a number of new bridges, expansion of existing ones, rainwater drainage and retaining walls, as well as traffic safety works.
2. Creating a Diversion in Manakhah and Construction of a Tunnel: This includes
the necessary works to divert part of the road in the mountain region of Manakhah
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which has a length of approximately 10 km, and construct a tunnel with a length of approximately 4.6 km.
3. Technical Services: This includes the necessary consultancy services to supervise the rehabilitation and expansion of the road, the assistance of experts, when necessary, to help supervise the project execution, as well as the training of the local cadre.
Financing:
The Arab Fund’s loan covers about 29% of the total project cost. The Central Bank of Yemen will also contribute to the financing of the project with an amount equivalent to about KD 64.3 million (about 62% of the total cost). The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
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ANNEx 1PROJECT 16 OF 18
Republic of SudanNyala – El-Geneina Transmission Line to the Darfur States
Loan No.: 599 Interest Rate: 2.5%
Beneficiary:Sudan Electricity Transmission Company (SETC)
Grace Period: 5 years
Project Cost: KD 68.0 million Maturity: 25 years
Amount of Loan: KD 57.0 million Repayment: 41 semi-annual installments
Date of Loan Agreement: 11/07/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at satisfying the increasing demand for electricity in several towns and villages in three Darfur States, by connecting them to the national transmission grid. The project will provide safe and low-cost electric energy to meet the lighting and cooking needs of the residents, the needs of the various economic sectors, and reduce the dependence on small, non-reliable and expensive diesel generating units currently used to supply the loads of the towns and villages included in the project.
Description:
The project, which is expected to be completed by the end of 2015, includes the construction of four 220 kV substations in the cities of Nyala, Kass, Zalinge and El-Geneina, located in three Darfur States, and a 350 km, 220 kV, double circuit transmission line connecting all four substations, and connecting the Nyala substation included in the project (Nyala “2”) with the national transmission grid, in addition to technical services required for the project. The project includes the following main components:
1. Electric Substations: This consists of the construction of Nyala “2”, Kass, Zalinge and El-Geneina 220 kV substations, including all civil works and measurement, protection and control equipment, and connecting the Nyala “2” substation with the planned 220 kV transmission line (Al Fula - Nyala”1” - El Fasher) which will pass by the substation.
2. Transmission Line: This includes the construction of a 350 km long, double circuit, 220 kV transmission line starting at Nyala “2” substation, passing through Kass and Zalinge substations, and ending at El-Geneina substation.
3. Technical Services: This includes providing consulting services needed for design review, project supervision, witness and acceptance testing, in addition to the use of experts as needed.
Financing:
The Arab Fund’s loan covers about 84% of the total project cost. The Sudanese Government will cover the remaining cost of the project and any additional cost that may arise.
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Islamic Republic of MauritaniaDrinking Water and Development of Oases in Rural Areas
Loan No.: 601 Interest Rate: 2.5%
Beneficiary:
Ministry of Economic Affairs and Development, Ministry of Rural Development, Agency for the Promotion of Universal Access to Basic Services
Grace Period: 7 years
Project Cost: KD 22.0 million Maturity: 25 years
Amount of Loan: KD 20.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 15/12/2013
First Installment: 7 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at providing drinking water to the inhabitants of rural villages in different parts of Mauritania, as well as improving their health and living conditions. The project also aims at developing groundwater sources and regulating surface water in oases for agricultural use. The project will contribute to strengthening the efforts to fight poverty and unemployment, improving farmers’ income, providing employment opportunities and maintaining the population in rural oases areas.
Description:
The project, which is expected to be completed during the third quarter of 2018, will rehabilitate existing drinking water facilities in about 100 rural villages which are currently being supplied by the National Office for Water Services in Rural Areas (National Office). Equipment and supplies of facilities in a number of other villages will also be rehabilitated. This project will also supply about 200 villages deprived of drinking water services, as well as prepare for the supply of around 200 other villages with drinking water by digging the necessary wells. In addition, the project will develop the rural areas in the oases through the provision of groundwater for the irrigation of about 1,100 hectares of palms and vegetables, and regulate surface water for the irrigation of about 1,150 hectares of grain, as well as replenish groundwater supplies. The project includes the following main components:
1. Drinking Water in Rural Villages:
a. Rehabilitation of Existing Drinking Water Facilities: This includes the preparation of about 100 wells with submersible pumps, and the establishment and rehabilitation of around 100 upper water reservoirs with capacities ranging between 20 and 200 m3 each. This also includes extending and replacing about 450 km of pipes with diameters ranging between 63 and 160 mm, installing about 10,000 house connections, 80 public faucets and 50 basins for watering livestock,
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replacing about 30 thousand water meters for the National Office customers, replacing about 700 meters for the production and distribution of water, in addition to rehabilitating about 300 hand pumps on existing wells, and replacing about 300 small submersible thermal powered pumps with solar powered pumps.
b. Establishment of New Drinking Water Facilities: This includes the preparation of about 200 wells with submersible pumps, the establishment of about 200 upper water reservoirs with capacities ranging between 20 and 200 m3 each, and the extension of about 1,400 km of pipes with diameters ranging between 63 and 200 mm. This also includes the installation of about 20,000 house connections, 400 public faucets and 200 basins for watering livestock.
c. Digging Wells: This includes digging about 200 groundwater wells with depths ranging between 60 and 140 m.
2. Rural Development Works in Oases: This component includes the following:
a. Wells and Irrigation Networks: This includes the preparation of about 30 existing wells with submersible pumps, digging about 50 wells and preparing them, establishing about 70 upper water reservoirs with capacities ranging between about 40 and 60 m3, and extending about 90 km of pipes with diameters ranging between 63 and 90 mm.
b. Rehabilitation and Construction of Small Dams and Levees: This includes the rehabilitation of about 3 existing small dams, and the construction of about 7 dams with heights ranging between 2 and 8 m each, and lengths ranging between 80 and 1,200 m. This also includes the construction of about 20 levees with lengths ranging between 70 and 210 m each, and a height of about 1.5 m.
3. Technical Services: This includes the provision of the technical and consultancy services necessary to prepare the studies and implementation plans, design and tender documents, and the supervision services for the implementation of the project. This also includes the provision of agricultural advisory services, the preparation of a laboratory for agricultural research with a goal to improve palm production, and the use of experts to support the agencies that manage the project’s implementation.
4. Institutional Support: This includes the provision of equipment, supplies, and means of transport for the management of the project’s implementation, as well as the training of employees, and the establishment of a center for the storage and packaging of dates.
Financing:
The Arab Fund’s loan covers about 91% of the total project cost. The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
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74 Annual Report 2013
Kingdom of MoroccoTangier Med II Port
(Phase II)
Loan No.: 602 Interest Rate: 3.0%
Beneficiary: Tangier Med 2 Company Grace Period: 5 years
Project Cost: KD 397.0 million Maturity: 22 years
Amount of Loan: KD 50.0 million Repayment: 35 semi-annual installments
Date of Loan Agreement: 17/12/2013
First Installment: 5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The Tangier Med II port project aims at contributing to the economic and social development in the Kingdom of Morocco, particularly the northern regions, through the construction of a second port. This port constitutes an extension of the existing Tangier Med I port, which began to operate in 2007 and was completed in 2008. The project also aims at meeting the increasing marine traffic demand, thereby making Tangier Med port complex, the largest container port in the Mediterranean region.
Description:
The project, which is expected to be completed by the end of 2016, includes the necessary infrastructure works for the new port, as well as all required facilities and equipment to enable the port to receive and handle large container vessels. The new port will have a total capacity of 5 million TEU (Twenty Foot Equivalent Unit). The project also includes all marine and civil works required for dredging the port basin and approach channel, construction of breakwaters and quays to accommodate and receive large vessels, and ancillary works required for the port operation, in addition to the necessary consultancy services. The project will be executed in 3 phases, and includes the following components:
A. Infrastructure Works:
1. Phase I: This phase contains works related to the construction of the first quay (Quay 1). This includes initial works such as site preparation and mobilization of construction equipment required for this phase. It also includes dredging and backfilling works for the deepening and leveling of the port basin and approach channel to the depth of 18 m. In addition, this phase includes the construction of two breakwaters, a main one with a length of 3700 m and a secondary one with a length of 1200 m. Quay 1 is 1200 m long and is divided into 3 berths of 400 m each. The Arab Fund is financing this phase with a KD 50 million loan (loan 558/2010).
ANNEx 1PROJECT 18 OF 18
Annual Report 2013 75
2. Phase II: This phase contains works related to the construction of Quay 2A. This includes initial works required for this phase, dredging works required for the construction of Quay 2A and deepening of the port basin in front of it, in addition to extending the secondary breakwater for 600 m. Quay 2A is 800 m long and is divided into 2 berths of 400 m each. This phase also includes ancillary works needed for the port operation such as service quay and buildings, utilities and roads.
3. Phase III: This includes the construction of Quay 2B, which is 800 m long and is divided into 2 berths of 400 m each.
B. Facilities and Equipment: This includes completing the container storage areas and providing the necessary equipment needed for the operation of the quays, in accordance with the requirements of the project phases.
C. Consultancy Services: This includes the consultancy services required for completing the project studies, and the construction supervision.
Financing:
The two loans provided by the Arab Fund (for phases I and II) cover about 25% of the total project cost. The project is also financed through a loan from the European Investment Bank equivalent to about KD 76 million (about 19%), a bond issue for an amount equivalent to KD 51 million (about 13%), and contributions to capital for a total amount equivalent to KD 136 million (about 34%). The company and the Moroccan Government will cover the remaining cost of the project and any additional cost that may arise.
ANNEx 1PROJECT 18 OF 18
76 Annual Report 2013
ANNEx 2PAGE 1 OF 2
Capital, Resources and Status of Loans and Grants 1972 - 2013
(KD Million)
Years Capital Total Resources Income Administrative
* Include Education, Health, Housing and Social Development.** Include Loan Commitments for Emergency Projects.
82 Annual Report 2013
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Annual Report 2013 83
Loans Extended to Beneficiary Member States 1974 - 2013
(KD 000)
ANNEx 5PAGE 1 OF 19
* Completed Project. ** Fully Cancelled Loan.
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2013
Disbursements as at
31/12/2013
Repayments as at
31/12/2013
(1) Hashemite Kingdom of Jordan1 Amman Northern Approach* 14/75 5,000 69 - 4,931 4,9312 Electric Power Development I* 19/76 6,000 - - 6,000 6,0003 Electric Power Development II* 43/77 5,900 - - 5,900 5,9004 Aqaba Water* 47/79 2,100 129 - 1,971 1,9715 Second Pan-Arab Telecommunications* 58/80 5,000 4,433 - 567 567 6 White Cement Industry (Jordan and Syria)* 78/82 5,000 - - 5,000 5,0007 Potable Water to the Rural Areas* 82/82 700 - - 700 700 8 Electric Power Development III (Aqaba Power Station)* 92/82 5,000 - - 5,000 5,000
12 Bani Haroun Dam for Municipal Water, Electricity and Irrigation (First Loan)*
210/88 17,000 127 - 16,873 16,873
13 South Power Supply: Adrar Power Station* 261/91 21,000 1,028 - 19,972 19,97214 Bashar-National Grid Power Link* 280/93 16,000 2,235 - 13,765 13,765
15 Bani Haroun Dam for Municipal Water, Electricity and Irrigation (Supplementary Loan)*
298/94 6,000 - - 6,000 6,000
16 Power Generating Station in Hassi Massoud* 324/96 40,000 57 - 39,943 39,94317 The Mitigation of Earthquake Risks (Second Loan)* 332/96 3,500 1,887 - 1,613 1,61318 Development of Small and Medium Industries* 339/97 10,000 1,012 - 8,988 8,988
19 Power Generating Station in Hassi Massoud (Supplementary Loan)*
353/97 10,000 47 - 9,953 9,953
20 Al-Hama Power Generation Station* 377/98 30,000 1,476 - 28,524 28,52421 Upgrading of the Electric Grid* 387/99 30,000 - - 30,000 30,00022 Development of Social Housing in the Central Region* 396/2000 35,000 12,190 - 22,810 22,810
23 Pumping and Conveyance of Bani Haroun Water (First Stage)*
415/2001 31,000 3,902 - 27,098 27,098
24 Conveyance of Bani Haroun Water (Conveyor to Othmania Dam)*
30 Rehabilitation of Sulphuric Acid Plant in Homs*
287/93 6,000 739 - 5,261 5,261
31 Zeizoun Power Generating Station* 291/93 30,000 689 - 29,311 21,71132 Agricultural Development in Jabal Al-Hoss* 307/95 2,500 832 - 1,668 744
33 Interconnection of Jordan and Syria Power Grids (Syria)*
312/95 30,000 - - 28,223 17,290
Loans Extended to Beneficiary Member States 1974 - 2013
(KD 000)
Annual Report 2013 89
ANNEx 5PAGE 7 OF 19
* Completed Project. ** Fully Cancelled Loan.
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2013
Disbursements as at
31/12/2013
Repayments as at
31/12/2013
(6) Syrian Arab Republic
34 Syria-Turkey Power Grid Interconnection and Reinforcing the Syrian Internal Network*
314/95 26,000 2,936 - 23,064 10,714
35 Construction of 66 kV Substations in Six Governorates*
319/95 15,500 - - 11,902 5,880
36 Agricultural Development in the Coastal and Central Areas*
327/96 17,500 6,559 - 10,941 3,741
37 Modernization of the Communications System in Syria (1.650 million new lines)*
351/97 26,000 - - 21,950 11,840
38 National Control Center for the Electric System* 366/98 10,000 - - 7,382 3,57539 Integrated Development in the Badia* 368/98 20,000 - - 14,659 5,97040 Lattakia - Ariha Motorway 379/98 30,000 - - 26,829 11,180
41 Modernization of the Communications System (Subscribers’ Networks)*
384/99 30,000 - - 30,000 10,260
42 The Expansion and Conversion to Combined Cycle of Nasrieh Power Plant *
409/2001 25,000 - - 9,293 2,860
43 Transformation Stations in the Industrial Cities of Rif Dimashq, Homs and Aleppo Provinces*
429/2002 9,000 - - 7,371 1,750
44 Rural Development in Idlib Governorate 433/2002 5,500 - - 606 -
45 Converting Zeizoun Power Station to Combined Cycle* 440/2003 22,000 - - 13,654 2,950
46 Power Generating Station in the South (Deir Aly)*
469/2004 30,000 - - 29,643 -
47 Arab Gas Pipeline Project - Third Stage (Aleppo - Kalas Section)
529/2008 10,000 - - 1,881 -
48 Expansion of Deir Ali Power Generating Station 536/2008 45,000 - - 20,169 - 49 Deir Al-Zor - Al-Boukamal Road 537/2008 16,000 - - 33 -
50 Power Generating Station in the Eastern Region (Deir Al-Zor)
493/2006 30,000 - - - -
51 Power Generating Station in the Eastern Region (Deir Al-Zor) - (Supplementary Loan)
565/2011 30,000 - - - -
Subtotal 696,975 39,447 - 467,123 273,023(7) State of Libya
1 Two Fish Packaging Plants in Sabrata and Zlaiten*
240/90 11,000 1,867 - 9,133 9,133
2 Libya-Tunisia Power Link * 244/90 2,200 784 - 1,416 787
3 Interconnection of the Libyan and Egyptian Power Grids (Libya)*
326/96 12,000 2,590 - 9,410 6,650
4 National Control Center for the Libyan Electrical System*
5 Rehabilitation of Electricity Installations (Supplementary Loan)*
304/94 7,000 291 - 6,709 4,929
6 Zahrani Power Station* 305/94 30,500 - - 30,500 23,2407 Saida and Sour Water Supply* 317/95 10,000 6 - 9,994 5,1498 Technical and Vocational Schools 323/96 15,000 - 83 13,945 9,460
9 Administrative Rehabilitation of Public and Independent Agencies*
325/96 6,000 5 - 5,995 3,587
10Rehabilitation of the Infrastructure and Buildings Damaged by the Israeli Aggression*
331/96 13,500 - - 13,438 6,574
11 The Lebanese University Project (First Loan)* 355/97 23,000 - - 23,000 12,54012 Syr El-Dania Jbab El-Homr / El-Hermel Road 356/97 6,000 - - 5,827 1,903
13 Beirut Southern Entrances: Khaldeh-Cocodi and Awzaee Roads*
363/98 12,000 6,076 - 5,924 3,544
14 Interconnecting the Lebanese and Syrian Electric Grids at 400 kV*
400/2000 8,000 - - 4,072 2,940
Loans Extended to Beneficiary Member States 1974 - 2013
(KD 000)
Annual Report 2013 95
ANNEx 5PAGE 13 OF 19
* Completed Project. ** Fully Cancelled Loan.
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2013
Disbursements as at
31/12/2013
Repayments as at
31/12/2013
(10) Republic of Lebanon15 Conveyance of Litani Water to Southern Lebanon 418/2001 31,000 - 2,065 8,684 1,96016 Control Center for the Lebanese Power Network 423/2002 7,000 - 119 6,402 95017 Infrastructure Upgrading in Beirut City 430/2002 17,000 - 542 9,313 5,39018 The Lebanese University Project (Second Loan)* 439/2003 6,000 1,583 - 4,417 1,517
19 Development of the Road Network and Main Intersections